- 5 -
claims he did not feel compelled to alert the authorities that he
was being extorted because Mr. Vaughan had told him, "don't worry
about it. I'll pay [the tax] when it comes due." Petitioner
claimed he did not amend his return to reflect the income because
he did not want to state under the penalty of perjury that he had
received the money.
At trial, petitioner claimed that the reason he initially
told the Internal Revenue Service that he received the money as a
bonus was because he had spoken with someone in the Internal
Revenue Service who had led him to believe that the Form 1099-
MISC was "all the proof the IRS needed", and that petitioner had
to explain why he did not pay the taxes on it. Petitioner
testified that the only explanation he could come up with as to
why he should not have to pay taxes on the money was that it was
employee compensation, not nonemployee compensation, and that
Vaughan should have paid the taxes on it. Petitioner admitted
that he sent respondent the three letters stating that he had
received the $10,638 as a bonus.
After he wrote the letters, petitioner was told by an
accountant that if petitioner had said from the beginning that he
did not receive the money, then the Form 1099-MISC would not be
proof in and of itself that he received the money, and the burden
of persuasion as to the payment of the money would be on
respondent. After he heard this, petitioner informed respondent
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011