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illegal drugs. The resulting deficiencies in income tax and
additions to tax are as follows:
Additions to Tax
Year Deficiency 6653(b)(1)(A) 6653(b)(1)(B) 6654
1986 $5,511 $4,133 * $267
1987 4,198 3,149 * 227
*Fifty percent of the interest due on the deficiency.
We decide the following issues:
1. Whether petitioner's case should be dismissed in part
for failure to prosecute properly. We hold it should.
2. Whether petitioner is liable for the addition to tax for
fraud under section 6653(b)(1)(A) and (B) for 1986 and 1987. We
hold he is.
Unless otherwise stated, section references are to the
applicable versions of the Internal Revenue Code, and Rule
references are to the Tax Court Rules of Practice and Procedure.
Background
Petitioner resided in Milan, Michigan, when he filed his
petition.1 Petitioner operated a restaurant during 1986 but shut
down operations by 1987. During 1986 and 1987, petitioner
engaged in several illegal drug transactions involving the
purchase and sale of cocaine. Petitioner conducted the illegal
1Petitioner was incarcerated in a Federal correctional
institution when he filed his petition but was released at the
time this case was set for trial.
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