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one of the witnesses at the trial, that petitioner initiated an
audit of the distributor and a lawsuit against the general
partner when the profit was not paid to the partners, and that at
trial the prosecutor's argument about Caldwell only referred to
witnesses who did not incriminate petitioner on this point, made
no effort to prove that petitioner intended to evade tax, and did
not prove that petitioner knew that the Caldwell deal was based
on an inflated purchase price or otherwise would lead to an
evasion of tax. There was evidence at trial that can reasonably
be interpreted to support many of these assertions.
On January 21, 1988, respondent sent petitioners two
statutory notices, one for 1974 and 1975 and the other for 1973,
1976, 1977, and 1978.3 On April 18, 1988, petitioners timely
filed their petition with this Court.4 When petitioners filed
their petition, they resided in Harrison, New York.
Discussion
3These notices contained determinations, now conceded by
respondent, that petitioner was liable for the fraud addition to
tax for all 6 years from 1973 through 1978 (not just for 1975),
and also that petitioner had received “profit from movie deals”
(i.e., skim income) in 1975 and 1976.
4Petitioners' case in this Court was consolidated with those
of petitioner's coconspirators and their spouses, but those other
cases have since been severed by reason of the comprehensive
settlements that have been reached in them, in which, as
indicated in the text, supra, the other conspirators have
conceded receipts of varying amounts of skim income and fraud
additions.
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