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year. When questioned regarding his Federal income tax
liabilities for each of the years in issue, petitioner stated
that he was not in business and had never had any interest in a
business.
During 1985, petitioner received $152 in interest on a
Federal income tax refund, $521.47 in interest earned on his Rohr
Federal Credit Union account, and $22.28 in interest earned on
his North Island Federal Credit Union account. Petitioner
improperly reported this interest on his 1985 return as "excluded
under Internal Revenue Code � 103(a)(1)".6
Petitioner understated his taxable income for 1983 through
1985 in the amounts of $19,609, $31,340, and $12,053,
respectively. Petitioner also failed to file his 1986 return and
had unreported taxable income for that year in the amount of
$11,710. Petitioner understated his income tax liabilities for
the years 1983, 1984, 1985, and 1986 in the amounts of $3,264,
$6,564, $1,403, and $1,311, respectively.
Addition to Tax for Fraud Under Section 6653(b) for 1983-86
Respondent determined that petitioner is liable for an
addition to tax for fraud for each of the years in issue.
6Sec. 103(a)(1) excludes from gross income interest earned
on the obligations of a State, Territory, or possession of the
United States.
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