Guilio J. Conti and Edith Conti v. Commissioner of Internal Revenue

BOYCE F. MARTIN, Jr., Circuit Judge.

Guilio J. Conti and his wife Edith appeal the Tax Court’s 99 T.C. No. 20, 1992 WL 238783; T.C.Memo 1992-016, 1992 WL 294942 (1992) finding that they substantially understated their income for 1986 and 1987. The Contis also challenge the penalties imposed for fraud and understatement of their tax liability. We affirm.

The record in this case is extensive and confusing, and we summarize only those facts necessary for an understanding of this appeal. Because of the lack of supporting documentation and because of large cash transactions, the Contis’ tax…