Ernest Newton - Page 4

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               from Frank Perrotti and Sons, Inc. and Peoples Bank,                   
               respectively, which were not reported on his returns.                  
                    m.  The petitioner failed to file an income tax                   
               return for the 1991 taxable year, even though he had                   
               substantial income which required him to file a return.                
                    n.  The petitioner failed to accurately report his                
               income, when he filed his income tax returns for the                   
               1992 and 1993 taxable years.                                           
                    o.  The petitioner's failure to file his 1991                     
               [return] and to report gross income in the amount of                   
               $365,464.00 and taxes due in the amount of $80,822.57                  
               were fraudulent with the intent to evade taxes.                        
                    p.  The petitioner's failure to report gross                      
               income in the amounts of $268,031.00 and $157,467.00                   
               for the 1992 and 1993 taxable years, respectively, was                 
               fraudulent with the intent to evade taxes.                             
                    [q].  The petitioner's understatement of his                      
               federal tax liabilities in the amounts of $76,176.58                   
               and $53,683.19 for the 1992 and 1993 taxable years,                    
               respectively, was fraudulent with the intent to evade                  
               taxes.                                                                 
                    [r].  A part of the underpayment of tax required                  
               to be shown on the petitioner's federal income tax                     
               returns for each of the taxable years 1991, 1992 and                   
               1993 is due to fraud with the intent to evade taxes.                   
               On January 2, 1998, respondent filed a request for                     
          admissions with the Court, a copy of which respondent had served            
          on petitioner on December 30, 1997.  Petitioner did not file any            
          response to the request for admissions.  As a result, each matter           
          set forth therein is deemed admitted.1  Rule 90(c); Marshall v.             
          Commissioner, 85 T.C. 267, 272 (1985).                                      


               1  The request for admissions reiterates many of the facts             
          alleged in the answer that were deemed admitted.                            




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