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Car and truck
expenses -- -- 1,781.60 9,901.00
Insurance -- -- 800.00 --
Total 6,772.16 5,823.94 8,955.28 10,961.00
Additionally, petitioner claimed an investment tax credit in the
amount of $821 for the purchase of a Corvette automobile in 1982.
Petitioner claimed similar expenses against the income he
received from Besco during the period 1974 through 1979.
During the course of Balash's investigation, Tubre and Kahn
admitted that they had lied with respect to petitioner’s
involvement in Besco’s sales to customers other than ASI.
Subsequently, Besco pled guilty to one count of violating section
7206(1) for filing a return containing a false statement with
respect to its payments to petitioner.
In April 1987, petitioner was indicted on four counts of tax
fraud for violating section 7206(1) by taking false deductions
with respect to the income received from Besco. Petitioner was
thereafter convicted on each count based on a plea of nolo
contendere.
In April 1992, an internal revenue agent initiated an
examination of petitioner’s tax returns for the taxable years at
issue. Subsequently, respondent determined that petitioner is
not entitled to a deduction for the Schedule C expenses claimed
for any taxable year at issue. Respondent further disallowed the
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Last modified: May 25, 2011