The Ninth Circuit Court of Appeals today released an opinion in SPARKMAN v. COMMISSIONER OF INTERNAL REVENUE, No. 06-71476. The panel consisted of Diarmuid F. O’Scannlain, J. Clifford Wallace A. Wallace Tashima, and Milan D. Smith, Jr., Circuit Judges.
MILAN D. SMITH, JR., Circuit Judge:
Petitioner-Appellant James Sparkman appeals the decision of the Tax Court upholding the Commissioner’s notice of deficiency with respect to tax years 1996 through 2000. See Sparkman v. Comm’r, T.C. Memo 2005-136 (2005). He objects to the Tax Court’s ruling that one of his business entities, Mercury Solar PTO, lacked economic substance and should be disregarded for income tax purposes. He contends that the Tax Court improperly excluded his amended 1997 and 2000 tax returns from evidence admitted, erred in holding that he had not substantiated several depreciation and charitable deductions, and erred in calculating his income for 1996, 1997, and 1999. Finally, he argues that the Tax Court erred in imposing accuracy-related penalties under Â§ 6662(a) of the Internal Revenue Code (I.R.C.). We reject each argument, and affirm the decision of the Tax Court. I. Facts and Procedural History James Sparkman has sold solar water heating systems to homeowners since 1983. Until 1993, Sparkman operated his business as a sole proprietorship, under the registered trade name “Mercury Solar.” . . .