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incorporated by petitioner under Delaware law in 1983 with the
ostensible primary purpose, as stated in its original certificate
of incorporation, of manufacturing and selling jewelry.
Renaissance had an underwritten initial public offering of common
stock that raised $750,000, which was placed in escrow.
Petitioner signed the joint authorization with the president of
the underwriter to pay the net proceeds of the offering,
amounting to $636,631, into a Renaissance bank account.
In 1988, a Federal grand jury returned a 12-count indictment
against petitioner, Mrs. Wynn, and Francis S. LaMagra, alleging,
among other things, criminal tax evasion under section 7201 for
1983 and 1984 and interstate transportation of stolen property
under 18 U.S.C. section 2314 (1988). Petitioner pleaded guilty
to tax evasion under section 7201 with respect to his personal
income tax return for 1983, and to interstate transportation of
stolen property under 18 U.S.C. section 2314 (1988). Petitioner,
in his guilty plea, admitted that he had omitted $85,000 in
taxable income for 1983 with intent to evade tax. The parties
have stipulated that the income petitioner failed to report on
his 1983 tax return included the following corporate funds of
Renaissance that petitioner converted to his personal use: (1)
$54,400 that petitioner transferred by wire from Renaissance to
Major Findings, Inc., on September 22, 1983, resulting in the
increased deficiency and additions that petitioner has conceded;
and (2) a check dated December 16, 1983, drawn on Renaissance's
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