By: A.J. Cook


Terence M. Bennett, M. D. found that if the facts in a court case are stacked against you, you lose.

As a property settlement in his divorce, he paid his wife $2.5 million cash. The Internal Revenue Service was curious about where he got that kind of money.

He said he bought and sold some cars for a friend and then borrowed the profit. The IRS didn't believe him and wanted to tax the profit.

This is the doctor's story: Ten years earlier, while working for Raytheon in Saudi Arabia, he befriended Abdul Aziz Ben-Jabr. Bennett, an antique car buff with 60 cars, agreed to buy and sell five cars for Ben-Jabr. So the physician bought a 1937 Mercedes Benz, a 1929 Bentley Tourer Speed Six, a 1936 Mercedes Roadster, a 1932 Mayback Zepplin and a Lagonda LG 45 Repead. He sold them to a guy in Stockholm, Sweden for $3 million. He says he then borrowed this from Ben-Jabr's family, and Ben-Jabr would confirm this, but he's dead.

The agency said the evidence points in another direction:

• Bennett bought several of the cars after Ben-Jabr's death. The doctor, however, claimed Ben-Jabr's family didn't notify him of the death until after he purchased the cars.
  
• The physician didn't have a note, a written agreement or any written evidence of a loan between himself and Ben-Jabr or his family.
  
• When dealing with his soon to be ex-wife, Bennett listed the cars as assets. The judge noted that persons usually don't sign statements damaging to themselves unless they are correct.
  
• He told a New Hampshire Police Officer, investigating a burglary at the doctor's home, he needed to sell several cars to finance his divorce and planned to sell them out of the country to avoid taxes.
  

The IRS increased his taxes and the doctor was driven in style to the poor house by the Tax Court.