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During the years in issue, Mr. Infelise and Mr. Jahoda
continued to operate and expand their gambling activities. Mr.
Infelise's income from these activities totaled $368,000,
$135,000, $110,000, $265,500, and $164,500 in 1983, 1984, 1985,
1986, and 1988, respectively. Mr. Jahoda managed the daily
affairs of the business and reported to Mr. Infelise. They
employed four men to collect debts and help run the daily
operations.
During the years in issue, Mrs. Infelise knew that the
Internal Revenue Service (IRS) was investigating Mr. Infelise's
gambling activities. In 1983, IRS agents searched petitioners'
home and seized cash, a radio scanner, and gambling records. In
December of 1986, IRS agents investigated Mr. Infelise's gambling
activities and raided Mr. Jahoda's home. At a dinner following
the raid of Mr. Jahoda's home, Mrs. Infelise was present during a
discussion between her husband and Mr. Jahoda relating to the
effect the raid would have on the business. During the years at
issue, Mrs. Infelise attended many other business and social
functions with Mr. Infelise's associates.
During the years in issue, petitioners filed joint Federal
income tax returns. The income from Mr. Infelise's gambling
activities was not reported on these returns. In 1992, Mr.
Infelise was convicted for, among other things, the false
preparation and filing of Federal income tax returns relating to
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Last modified: May 25, 2011