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some part of the underpayment is due to fraud within the meaning
of section 6653(b), for each of the 1985, 1986, and 1987 taxable
years. Respondent supports her motion with three exhibits: (1) A
grand jury indictment of petitioner, Seth Wapnick, Jon Wapnick
and Steven Wolfson, (2) a judgment in a criminal case entered
against petitioner by the U.S. District Court for the Eastern
District of New York, and (3) the opinion of the U.S. Court of
Appeals for the Second Circuit affirming the convictions of
petitioner, Seth Wapnick, Jon Wapnick, and Steven Wolfson in the
U.S. District Court for the Eastern District of New York.
Petitioner claims that the doctrine of collateral estoppel
is inapplicable for the 1985, 1986, and 1987 taxable years
because the prior proceedings did not determine the amount of
underpayment, the elements for collateral estoppel are not
otherwise met, and the facts support an exception to the
applicability of collateral estoppel. Thus, the Court must
decide whether petitioner is collaterally estopped from disputing
that a portion of the deficiencies in his Federal income tax for
1985, 1986, and 1987 was due to fraud within the meaning of
section 6653(b) on account of his criminal conviction under
section 7201. We hold that he is.
Background
Harold Wapnick filed a Federal income tax return for each of
the 1985 and 1986 taxable years, but not for the 1987 taxable
year.
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