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$970,000 from marijuana trafficking activities and that he “did
willfully attempt to evade and defeat the said income tax due” on
that amount in violation of section 7201.
On November 28, 1997, the District Court entered a judgment
in the criminal case against Fagan finding him guilty, inter
alia, of the offense of Income Tax Evasion under section 7201 for
the year 1987. Fagan had pleaded guilty to Counts One, Two, and
Three of the Information, described above. Fagan was represented
by his then attorney, Christopher H. Wing.
Section 6653(b)(1)(A) provides an addition to tax if any
part of the underpayment was due to fraud, in the amount of 75
percent of the portion of the underpayment attributable to fraud.
Section 6653(b)(1)(B) provides an addition to tax equal to 50
percent of the interest due with respect to the portion of the
underpayment that is attributable to fraud. To establish fraud
under section 6653(b) respondent must prove by clear and
convincing evidence: (1) That there was an underpayment of tax
for each year; and (2) that a portion of the underpayment for
each year was due to fraud. Sec. 7454(a); Rule 142(b).
To establish that there was an underpayment and that a
portion of the underpayment for each year was due to fraud,
respondent relies on petitioner’s criminal conviction under
section 7201. Respondent argues that petitioner’s conviction for
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Last modified: May 25, 2011