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for the addition to tax under section 6653(b)(2) of 50 percent of
the interest payable on the entire deficiency.
Petitioner was a certified public accountant in 1984. He
was convicted of forgery and filing a false tax return relating
to four Federal income tax refund checks totaling $195,489 issued
to clients. He was acquitted of embezzling $676,721 from a
client trust fund. The issues for decision are:
1. Whether petitioner is collaterally estopped from
denying that he received but failed to report a substantial
amount of income on his 1984 return from Federal income tax
refund checks payable to his clients. We hold that he is, and
that he is liable for income tax on $195,489 from those checks.
2. Whether petitioner is liable for income tax on $676,721
that he received in 1984 as a trustee for clients. We hold that
he is.
3. Whether petitioner is liable for the addition to tax
for fraud under section 6653(b) for 1984. We hold that he
committed fraud as to the amount attributable to his handling of
the refund checks, but that he did not commit fraud for the
amount of clients' land sale proceeds he received as a trustee.
4. Whether petitioner is liable for the addition to tax
for substantial understatement of income tax under section
6661(a) for 1984. We hold that he is.
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