- 6 - paid the full restitution amount and served all of the community hours required of her. Petitioner's probation was terminated early, because she completed the terms of her probation in an exceptional manner. OPINION Respondent, pursuant to section 6653(b), determined that petitioner is liable for additions to tax for fraud and interest thereon for failing to report embezzled income on her 1984 and 1985 tax returns. Petitioner admits that she embezzled money from her former employer and that she did not report the income. She asserts, however, that she did not intend to evade taxes. Rather, petitioner claims that she did not know that embezzlement income is taxable. If petitioner prevails, respondent is barred by the section 6501(a) limitations period from assessing and collecting any tax and additions thereto from her for the years in issue. Respondent argues that petitioner's failure to report the embezzlement income in 1984 and 1985, her guilty plea under section 7206(1), combined with withholding bank records from tax preparers and respondent, and refusing to sign an amended return reporting the embezzled funds, establishes petitioner's requisite intent to commit fraud. For the reasons discussed below, we agree with petitioner. 4(...continued) possible. We therefore disregard the stipulation as clearly erroneous.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
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