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Petitioner also feared criminal prosecution. Murphy had
been arrested and the Troon Mortgage conduit disrupted.
Petitioner was under investigation by a grand jury. Petitioner's
fear of prosecution drove him in October 1986 to file a document
that, as we have held, was not a tax return. Petitioner was
afraid that a proper return could reveal his illegal sources of
income and perhaps tie him to the money laundering. Max Forman,
the accountant who had advised him and Ben on the card club
investment, had signed the 1985 Form 1040 that petitioner and
Maxine jointly filed. With Forman's advice and preparation, that
Form 1040 completely lacked the requisite detail about income and
deductions, even to the point of excluding the SGA "wages", the
interest income, and bona fide deductions such as home mortgage
interest. Fear of criminal investigation must have driven the
decision to disclose no detail, because petitioner also inscribed
a legend on the document that referred to the possible effect
that the outcome of the grand jury investigation could have on
his tax liability.
By 1987, petitioner's fear of criminal prosecution had grown
even stronger. Ben's criminal enterprise was falling apart, and
petitioner was trying to help him in the wake of his arrest by
ensuring that his lawyers were paid. Petitioner also ensured
20(...continued)
Even if respondent could establish receipt of the $250,000
in 1987, she has not asserted an increased deficiency pursuant to
sec. 6214(a). Accordingly, we have not considered this in
discussing the amount of the unreported income for 1987.
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