Adel Abdalla - Page 2

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                        Additions to Tax3                                             
          Sec.             Sec.           Sec.                                        
          Year    Deficiency    6653(b)(1)(A)    6653(b)(1)(B)   6653(b)(1)           
          1987       -0-         $48,272.78        $6,565.11         ---              
          1988       -0-            ---               ---        $39,920.66           
          Background                                                                  
               Petitioner invoked the jurisdiction of this Court on                   
          November 23, 1994, by timely filing a petition for                          
          redetermination.  Petitioner resided in Schnecksville,                      
          Pennsylvania, at the time the petition was filed.  Respondent's             
          answer, filed on March 6, 1995, after an extension to file the              
          answer was granted, asserted affirmative allegations of fact in             
          support of the foregoing additions to tax for fraud.                        
          Respondent's answer reads, in pertinent part, as follows:                   
               7.  FURTHER ANSWERING the petition, and in support of the              
               determination that a part of the underpayments of tax                  
               required to be shown on the petitioner's income tax returns            
               for the taxable years 1987 and 1988 are due to fraud, the              
               respondent alleges:                                                    




          2(...continued)                                                             
          subsequent to being contacted by the Internal Revenue Service               
          regarding the examination of his originally filed 1987 and 1988             
          returns, petitioner filed amended returns wherein he admitted               
          understating his tax liabilities for 1987 and 1988 in the amounts           
          of $64,363.71 and $53,227.64, respectively.  The filing of                  
          amended returns, however, does not vitiate any fraud perpetrated            
          when the returns were due.  See Badaracco v. Commissioner, 464              
          U.S. 386, 394 (1984).                                                       
          3  The additions to tax for fraud determined by respondent in the           
          notices of deficiency were based on the understated tax                     
          liabilities reported by petitioner on his amended 1987 and 1988             
          returns.                                                                    



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