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In James, the Court stated that "This standard brings wrongful
appropriations within the broad sweep of 'gross income'". Id.
Petitioner is deemed to have admitted facts which establish
substantial, intentional omissions of taxable income for 1984 and
1985. The deemed admissions establish that petitioner was a
participant in an investment scheme from which he received over
$1 million from investors in 1984 and nearly $2 million from
investors in 1985. Specifically, petitioner is deemed to have
admitted under Rule 90(c) that:
10. [he] filed his federal individual income tax
return for the calendar year 1984, which income tax
return was not true and correct in that he did not
report his income from his involvement in the
investment scheme.
11. [he] filed his Federal income tax return for
the calendar year 1985, which income tax return was not
true and correct in that he did not report his income
from his involvement in the investment scheme.
* * * * * * *
16. [he] omitted all of his income in the amounts
of $1,100,411.00 received in 1984 and $1,905,387.00
received in 1985 from the investment scheme, from his
1984 and 1985 income tax returns, respectively * * *.
17. [he] understated his income and his tax
liability for the years 1984 and 1985.
The deemed admissions establish that there is no genuine issue of
material fact with respect to the deficiencies in issue.
Marshall v. Commissioner, supra at 271-272; Freedson v.
Commissioner, supra at 334-336. We grant summary judgment to
respondent with respect to those deficiencies.
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