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As of March 1979, prior to the time the original 1979 return
was filed, Special Agent Bennett had begun a criminal
investigation regarding petitioner's tax returns.
On petitioner's 1979 joint Federal income tax return, as
originally filed, petitioner included in income $1,617,761 which
he had received, had in his possession, and for which he claimed
ownership. Petitioner filed an amended joint return for 1979,
claiming that his 1979 income should be reduced by $348,350.
Petitioner states that this amount is attributable to a lawsuit
involving the 1977 sale of his Diesel Power stock. The record
contains no explanation as to how the $348,350 claimed reduction
was calculated.
On the joint 1981 tax return petitioner claimed that the
calculated tax due of $315,928 should be reduced to $0.
Petitioner states that he is entitled to deduct $735,000
previously included in income under a claim of right because that
amount had been repaid. The only evidence offered in support of
the $735,000 calculation was Exhibit 556-UJ. That exhibit was
admitted by the Court for the limited purpose of establishing
that litigation had occurred.
The 1977 sale of Diesel Power stock was a separate tax event
from the 1979 claim of right over commission income held by
petitioner. Therefore, he is not entitled to reduce reported
1979 income by the $348,350 unexplained claim.
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