Anthony and Gloria Donnora - Page 4

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          diversion of large amounts of Forkston’s cash receipts for their            
          personal use was fraudulent with intent to evade tax.  Further,             
          in paragraph 7 respondent alleges that, as a result of                      
          petitioners’ diversion of part of Forkston’s cash receipts to               
          their personal use, petitioners understated their taxable income            
          and their tax liabilities by the amounts shown in table 1.                  
                                       Table 1                                        
                              Understatement of       Understatement of               
                    Year          Taxable Income          Tax Liability               
                    1988            $43,114                  $9,090                   
               1989           82,582                  20,791                          
          1990            112,934                  31,436                             
          These are the same amounts as those in the notice of deficiency.            
          In paragraph 7 respondent also alleges that Anthony was convicted           
          under section 7206(2)3 for aiding and assisting in the filing of            
          false income tax returns for Forkston for 1988, 1989, and 1990.             



               3    SEC. 7206.  FRAUD AND FALSE STATEMENTS.                           
                    Any person who--                                                  
                    *     *     *     *     *     *     *                             
                         (2) Aid or assistance.--Willfully aids or assists            
                    in, or procures, counsels, or advises the preparation             
                    or presentation under, or in connection with any matter           
                    arising under, the internal revenue laws, of a return,            
                    affidavit, claim, or other document, which is                     
                    fraudulent or is false as to any material matter,                 
                    whether or not such falsity or fraud is with the                  
                    knowledge or consent of the person authorized or                  
                    required to present such return, affidavit, claim, or             
                    document;                                                         




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