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petitioner was sentenced to pay a fine of $30,000. At the
arraignment, plea, and sentencing of petitioner, the presiding
United States District Court Judge declared the following as one
of the conditions of petitioner’s criminal sentence:
You must cooperate with the I.R.S. and submit all
delinquent tax returns and pay all back taxes and
interest at the direction of the Probation Officer.
The Court should note in regard to this condition that
in determining the sentence that–-the amount of tax
penalties, civil penalties, the distressed sale of the
bank, all of these are consequences that flow from your
action, and are ones that I think are appropriately
taken into account by the Court.
On September 8, 1998, respondent issued a notice of
deficiency to petitioner for the years 1989, 1990, 1991, 1992,
and 1993. The deficiency amounts were higher than in the
addendum to the plea agreement because the tax stated as due in
the addendum did not include the additional income tax resulting
from adjustments to petitioner’s 1990, 1991, 1992, and 1993
income tax liabilities for claiming false mortgage interest
deductions. Additionally, the notice of deficiency determined a
fraud penalty for each of the years in issue. The total
deficiency determined by respondent for all 5 years is $24,535, a
$9,391.76 difference from the tax liability of $15,143.24 set
forth in the addendum to the plea agreement. Petitioner has
conceded the amount of the underpayments set forth in the notice
of deficiency.
In separate letters dated March 7, 2000, and submitted in
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