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After learning that respondent was investigating him for
possible criminal tax violations, petitioner, in March 1990,
retained Tristan P. Junius (Junius) to prepare his tax returns
for tax years 1981 to 1988. Petitioner gave Junius his records,
including Forms W-2, Forms 1099, and pay stubs.
C. Petitioner’s Tax Returns for 1985, 1986, and 1987
In August 1990, petitioner filed delinquent tax returns for
1985, 1986, and 1987. Petitioner reported the following income
and tax liabilities:
1985 1986 1987
Gross Income $48,365 $56,761 $34,382
Less:
Standard deduc. -- -- (1,888)
Exemptions (4) (4,160) (4,320) (7,600)
Taxable income 44,205 154,236 224,902
Tax 13,354 17,608 5,269
Less:
Tax withheld (823) -- (2,637)
Tax due per return 12,531 17,608 2,632
1 To calculate taxable income for 1986, petitioner
subtracted $4,320 from $58,556. There is no evidence about how
petitioner calculated $58,556.
2 To calculate taxable income for 1987, petitioner
subtracted $1,880 from $34,382 which equaled $32,502. He then
subtracted $7,600 from $32,502 which equaled $24,902.
D. Petitioner’s Conviction for Tax Evasion and Willful Failure
To File a Return
On April 1, 1992, petitioner was indicted for income tax
evasion under section 7201 for 1985 and 1986, and for willful
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