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In 1993, petitioner was convicted in Utah State court of
securities fraud, of selling unregistered securities, and of
selling securities as an unregistered agent.
As indicated, petitioner did not maintain adequate books and
records relating to the income he realized on his investments, to
the various investor funds that were transferred to and received
by him, and to his business expenses.
For 1984 through 1989, petitioner did not make estimated tax
payments, and for those years, petitioner has never filed
individual Federal income tax returns. In fact, it appears that,
for at least 16 years (1978 through 1993), petitioner has failed
to file individual Federal income tax returns.
During respondent’s audit, petitioner was generally
uncooperative. For example, petitioner specifically denied to
respondent’s agent that he owned any bank accounts.
On audit and in the notice of deficiency for the years in
issue, using a combination of the specific item and bank deposits
methods of proof, respondent charged petitioner with total
unreported income for each year as follows:
Year Unreported Income
1984 $ 102,985
1985 34,459
1986 281,042
1987 3,072,219
1988 197,223
1989 173,946
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