Charles and Martha McHan - Page 4

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          violation of 21 U.S.C. sec. 848.  Charles was also charged and              
          found guilty on three counts for filing false tax returns for the           
          years 1985 and 1986 in violation of section 7206(1).                        
               Charles was subsequently convicted on the final count and              
          was ordered to forfeit his profits from the illicit activities to           
          the U.S. Government.  The District Court found that Charles and             
          the other persons involved in the illegal conduct made profits of           
          $398,430 and $33,240 in 1985 and 1986, respectively, and                    
          sustained a loss of $36,000 in 1987.  United States v. McHan, No.           
          B-CR-90-41 (W.D.N.C. December 10, 1993).  Charles was sentenced             
          to prison, and he is currently still incarcerated.                          
               The deficiencies in question and additions to tax for fraud5           
          arise from respondent's determination that petitioners had                  
          unreported income due to Charles' sales of illegal drugs,                   
          principally marijuana.  In their petition, petitioners pleaded              
          that they had no illegal income for the years at issue, and that            
          the notice of deficiency is without merit.  Martha filed an                 
          amendment to amended petition, in which she pleaded innocent                
          spouse relief under section 6013(e).                                        
          Discussion                                                                  
               Summary judgment is intended to expedite litigation and                
          avoid unnecessary and expensive trials.  Florida Peach Corp. v.             
          Commissioner, 90 T.C. 678, 681 (1988).  Summary judgment may be             
          granted with respect to all or any part of the legal issues in              


          5    The additions to tax for fraud were asserted against Charles.          



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