T.C. Memo. 1999-16
UNITED STATES TAX COURT
AJF TRANSPORTATION CONSULTANTS, INC., ET AL.,1 Petitioners
v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 12590-95, 24190-96, Filed January 28, 1999.
24482-96, 24483-96.
J is a corporation engaged in furniture delivery
services. F is J's sole shareholder and president. J's
client issued checks to J for its delivery services and for
fuel costs. F cashed the checks personally and diverted the
funds for his own personal benefit. None of the diverted
funds were reported as income on F's individual tax returns
or on J's corporate tax returns for the 1988, 1989, and 1990
taxable years. J did not timely file its corporate tax
returns for the years at issue. R determined that the full
amount of the diverted funds was taxable to both J and F.
R's deficiency notices were issued more than 3 years after J
and F's income tax returns were filed.
1. Held: The period of assessment is unlimited
because J and F filed fraudulent tax returns. Sec.
6501(c)(1), I.R.C.
1Cases of the following petitioners are consolidated
herewith: AJF Transportation Consultants, Inc., docket No. 24190-
96; Anthony J. Ferrentino, docket No. 24482-96; and Anthony J.
Ferrentino and Carol L. Ferrentino, docket No. 24483-96.
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