Mary Ruark v. Commissioner of Internal Revenue

Taxpayer, Mary Ruark, appeals from a judgment of the Tax Court holding her liable for tax deficiencies and additions assessed under the civil fraud provisions of 26 U.S.C. § 6653 (b). The pertinent facts are not in dispute. From a rather modest beginning and equipped only with an eighth grade education taxpayer has spent most of her life working at various unskilled jobs; three marriages have contributed little to her economic well-being. In 1959 taxpayer purchased a small restaurant located in one of the older and less pretentious sections of Yakima, Washington. Her customers were migrant farm laborers, for whom she provided, in addition to food, truck transportation to the fields. Nonetheless, by the end of 1960 taxpayer had accumulated in various bank accounts a total of $50,099.77. Four years later these balances had increased to $91,263.69.

Taxpayer did not report any interest income on her 1961 and 1962 tax returns (which she signed “Mary Sehaufler”) though her savings increased substantially; $841.68 and $2,091.10 were reported as interest income respectively on her 1963 and 1964 returns (signed Mary Ruark). From her restaurant operations during the years in question, 1961…