Kovacevich

MEMORANDUM **

Robert E. Kovacevich and Yvonne R. Kovacevich (“Petitioners”), husband and wife, appeal the decision of the United States Tax Court, upholding the Commissioner of Internal Revenue’s determinations of deficiencies in their 1992 and 1994 federal income taxes, and additions to tax in the form of a “negligence penalty” under 26 U.S.C. § 6662 (b)(1).

Based on the record before us, we affirm the decision of the Tax Court in its entirety. With respect to Petitioners’ specific assignments of error, we find as follows:

1. The Tax Court did not clearly err in finding that Petitioners did not keep adequate records. Thus, the Commissioner’s use of the “specific item” method to reconstruct Petitioners’ income was appropriate. Choi v. Comm’r, 379 F.3d 638, 640 (9th Cir.2004).

2. The Commissioner’s deficiency determinations were properly entitled to a presumption of correctness because they were supported by specific evidence linking Petitioners to income producing activity (i.e., Mr. Kovacevich’s provision of legal services on behalf of Robert E. Kovacevich, P.S.). Rapp v. Comm’r, 774 F.2d 932, 935 (9th Cir.1985). This evidence consisted of the corporation’s tax returns and…

concurring.

I concur in the result.