David M. Leggett - Page 16

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          payments totaling $6,300 for 1992, petitioner did not make                  
          estimated tax payments for the years at issue.  No amounts were             
          withheld by Biddle for any of the years at issue from the com-              
          pensation that Biddle paid petitioner during those years.  On               
          March 4, 1994, petitioner submitted to the Service false Forms              
          1040NR seeking refunds of taxes previously paid for 1984 through            
          1992.  Petitioner dealt primarily in cash during the years at               
          issue and concealed certain real properties that he and Ms.                 
          Leggett owned by transferring them to nominees.  Petitioner                 
          failed to cooperate with respondent's representatives during                
          respondent's audit of him.                                                  
               Despite the foregoing indicia of fraud on the part of                  
          petitioner that are established by the record, petitioner claims            
          that he did not intend to evade taxes for the years at issue.  He           
          contends that his failure to file returns and pay taxes due for             
          those years was based on his good-faith misunderstanding that the           

               4  (...continued)                                                      
          petitioner submitted the false Form W-8 to Biddle.  The parties             
          stipulated that petitioner worked for Biddle during the years at            
          issue as an employee, and not as an independent contractor.                 
          However, it is not clear from the record how Biddle treated                 
          petitioner during those years.  In this connection, Biddle and              
          petitioner entered into a purported contract in January 1995,               
          which stated that petitioner was neither an employee nor an                 
          independent contractor of Biddle.  Moreover, although petitioner            
          made estimated tax payments totaling $6,300 for 1992, at the time           
          in June 1993 when he submitted the false Form W-8 to Biddle, he             
          had stopped making estimated tax payments.  We believe that the             
          submission of that false form was an attempt by petitioner to               
          make sure that Biddle did not withhold any amounts from the                 
          compensation that he paid petitioner.                                       

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