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when he did not expect to incur a $31,000 tax liability for his
1980 taxable year.
Around the time of remitting the $31,000 check, petitioner
was in the process of obtaining a divorce and was engaged in an
activity for which he was ultimately incarcerated. As of that
time, petitioner had filed a 1978 return, yet he had not filed a
1979 return, which was past due. Petitioner also began
squandering money on and personally using cocaine. Ultimately,
petitioner failed to timely file his 1979, 1980, 1981, and 1982
Federal tax returns. Petitioner’s reasons for remitting the
$31,000 were that: He possessed extra funds at that time; he was
concerned about his divorce; his cocaine use was affecting his
judgment; he was engaged in illicit activities; and he knew that,
ultimately, he would be liable for some tax. With respect to his
cocaine use, petitioner had noticed that it affected his
judgment, and he was concerned that, at some point, he would not
be capable of meeting his Federal tax obligations.
When petitioner decided, as a precaution, to send respondent
the $31,000, he did so without the assistance of an accountant or
lawyer. Petitioner, without any specialized knowledge of the tax
laws, sent the $31,000 check with the "1st Est 1980" notation
because, other than filing a tax return, it was the only method
he knew to make an advance Federal income tax remittance. Prior
to the time of the $31,000 remittance, petitioner never filed an
estimated tax return or made any estimated payment to respondent.
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Last modified: May 25, 2011