Jack Showell and Dorothy Showell v. Commissioner of Internal Revenue

Herein the Tax Court has made the following preliminary statement and findings:

On review here, the petitioners’ first point is: How can the Commissioner of Internal Revenue and the Tax Court take from the sketchy Exhibit 3 all of the income items on the left hand side and disallow those items of deduction on the right hand side? Further, the items on the left necessarily are the end result of allowing certain deductions on those days where there was a profit. How can that be done, ask the taxpayers, and still disallow their losses on the days when there were net losses?

Of course, the purpose of justice is to ascertain the truth. But how, as a prac *152 tical matter can a fact trier ever be quite sure he has got the truth in a case like this?

(Reference now should be made to the Tax Court’s opinion, Showell v. Commissioner of Internal Revenue, 23 T.C. 495 . The text herein will assume knowledge of the contents of that opinion.)

Just as the Tax Court reasons, we see no objection, in the absence of better evidence, to the Commissioner using the left hand figures as income on the theory of admissions against interest. If the findings were a little different here, we would find…

On Petition for Rehearing

Appellants file a “petition for rehearing en banc.” We treat it as a petition for rehearing addressed to the court as constituted for the hearing of the case. Further, we consider it as a suggestion for a rehearing en banc. This is all in accordance with the court’s Rule 23. The petition for rehearing is denied and the suggestion for a rehearing en banc is rejected.

Appellants fear we have announced a rule herein that a taxpayer must prove his deductions conclusively. Such is not the law and we have not said it is.

The opinion said the remand is “on the ground that the findings are not sufficiently definitive.”

Ordinarily, if the government takes the left hand of taxpayer’s account sheet it should take the right hand, too. The findings here seem to say first the books are all right. Then other findings are made which are inconsistent.

There may be cases where it is not necessary to accept the right hand column of figures. This could be one. We do not say it is.

To be specific, on the surface there is a sameness in the figures January 1 to December 7 inclusive that doesn’t look right. To the untrained eye they look as if they were made at one sitting with one pencil. Maybe…

238 F.2d 148 56-2 USTC P 10,078 , 56-2 USTC P 9964 Jack SHOWELL and Dorothy Showell, Petitioners, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. No. 14760. United States Court of Appeals Ninth Circuit. Oct. 10, 1956 Rehearing Denied Nov. 21, 1956. W. L. McLane, Jr., Nola McLane, Phoenix, Ariz., for petitioners. H. Brian Holland, Asst. Atty. Gen., Ellis N. Slack, Marvin W. Weinstein, Sp. Assts. to Atty. Gen., for respondent. Before HEALY, POPE and CHAMBERS, Circuit Judges. CHAMBERS, Circuit Judge. 1 Herein the Tax Court has made the following preliminary statement and findings: 2 'The respondent determined deficiencies in the income tax of the petitioners for 1949 as follows: 3 Docket No. Deficiency --------------------------- ---------- Jack Showell ........ 48153 $3,946.65 Dorothy Showell ..... 48154 4,065.69 4 'The only question for determination is the correctness of the respondent's action in determining that each of the petitioners realized income of $11,281.83 from wagering operations during 1949 which was not reported in their respective income tax returns for said year. Findings of Fact 5 'The petitioners are husband and wife and filed their separate income tax returns…