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Wagner (petitioner) is liable for the fraud addition to tax for
the year in issue. After concessions, the sole issue for
decision is whether we should conclude, as a matter of law, that
petitioner is liable for the section 6653(b) addition to tax for
fraud for the taxable year 1975.
The facts set forth in the Background portion of this
Opinion are stated solely for the purpose of deciding the motion
and are not findings of fact for this case. Fed. R. Civ. P.
52(a); Boyd Gaming Corp. v. Commissioner, 106 T.C. 343, 345 n.5
(1996); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520
(1992), affd. 17 F.3d 965 (7th Cir. 1994).
Background
On May 26, 1982, a grand jury convened in the U.S. District
Court for the Southern District of New York indicted petitioner
and three alleged coconspirators for various crimes. The
indictment described a scheme, as summarized below, to establish
fraudulent tax shelters through the creation of limited
partnerships, including Caldwell Properties (Caldwell), whose
funds, contributed by individual investors solicited by the
defendants, were used to finance the purchase of movie rights.
The tax deductions and credits to which the investor-partners
thereby ostensibly became entitled were grossly inflated by the
reporting of purchase prices for the movies that greatly exceeded
the prices actually paid by the purchasers. To perpetrate the
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