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years 1980, 1981, and 1982. After a jury trial, petitioner was
convicted on all counts. He appealed his convictions, see United
States v. Toushin, 899 F.2d 617 (7th Cir. 1990), and the case was
reversed and remanded by the Court of Appeals.
On August 8, 1991, petitioner signed a "Plea Agreement" with
the Government. In the agreement he acknowledged that during the
year 1980 he received income from skimming cash proceeds from
E & A of Illinois. Petitioner further acknowledged that he knew
he was required to report as income, but knowingly did not
include, the skimmed proceeds on his joint individual tax return
for the year 1980. The District Court accepted petitioner's
plea, entered judgment against him on count one and dismissed
counts two and three concerning the years 1981 and 1982.
In her notice of deficiency, respondent determined that
petitioner had unreported income for the years 1980, 1981, and
1982 attributable to funds diverted from E & A of Illinois.
Further, respondent affirmatively alleges in her amended answer
that petitioner in all 3 years received and fraudulently failed
to report income in the form of "diverted receipts or, in the
alternative, constructive dividends" from E & A of Illinois.
Discussion
Arguments Of The Parties
In support of his motion for partial summary judgment,
petitioner argues that, as a matter of law, respondent cannot
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