- 32 -
Respondent concedes that the above checks, totaling
$288,560.47, were included in Beaufort Leaf's unreported
income for 1991, as determined by respondent. There is no
evidence that any other unreported income was related in
any way to the scheme to sell excess-quota tobacco.
As a preliminary matter, several comments about the
facts of these cases are in order. First, we disagree
with petitioners' assertion that the source of all of
the unreported income at issue was the "illegal scheme
engineered by Harry Lee Roberts whereby Roberts was engaged
in numerous sales of over-quota tobacco, in violation of
federal law and Department of Agriculture regulations."
Petitioners assert that respondent's answer acknowledged
that the unreported sales of tobacco were "the direct
result" of the illegal scheme. Contrary to petitioners'
assertion, respondent's answer admitted only that
Mr. Roberts engaged in such a scheme, but it did not
admit that the scheme was the source of all or any of the
unreported income determined in these cases. As discussed
above, there is no evidence that any of the unreported
income in 1990 or 1991 was related in any way to the
scheme, except for $288,560 in 1991 that was deposited into
accounts controlled by Mr. Wells. Even as to this amount,
there is nothing in the audit report involving Mr. Wells
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