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All in violation of Title 26, United States Code,
Section 7206(1).
Respondent determined that petitioner fraudulently omitted
from income the interest on the foreign bank accounts for each
taxable year at issue. She also determined that petitioner made
the 66 deposits to the foreign account using unreported income,
and that petitioner failed to report the short-term capital gain
realized in 1980. Respondent thereafter issued the notice of
deficiency, reflecting those determinations, on November 4, 1994.
OPINION
Petitioner concedes that he failed to report gross income
from both the interest earned on the foreign account and the
short-term capital gain that he realized in 1980. He maintains,
however, that respondent is precluded from assessment and
collection of the deficiencies in and additions to tax determined
in the notice of deficiency because the statute of limitations
has expired for each year at issue. Respondent disagrees,
contending that each limitations period remains open because
petitioner filed fraudulent tax returns for the corresponding
taxable years. Respondent further maintains that petitioner has
not established a nontaxable source for the 66 deposits that he
made to the foreign account, and, as a result, such deposits
constitute unreported income taxable to him. Petitioner
disagrees and contends that he has established a nontaxable
source for the deposits at issue.
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