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In 1991, the State of Minnesota audited Metro. McGraw did
not disclose to the State auditor, and the auditor did not
discover, the income omissions or fictitious expenses. Metro was
dissolved on December 11, 1991.
In 1995, David Kraemer discovered that Miller had received
kickbacks from Metro and filed suit, on behalf of Kraemer & Sons,
against Wybierala and Butler for unpaid dumping fees.
On June 28, 1995, Butler pled guilty to violating section
7206(2) relating to Metro’s 1988 return (i.e., aiding and
abetting the filing of a false corporate return), and section
7206(1) relating to his 1988 individual return (i.e., filing a
false personal income tax return). Butler admitted knowing that
Metro’s 1988 return did not include all of Metro’s taxable income
and agreed to pay $1.5 million toward his individual, and
Metro’s, tax liabilities. In 1997, Miller pled guilty to
violating section 7201 for failing to report cash received from
Butler (i.e., presenting a false or fraudulent return).
On November 30, 1999, respondent issued petitioners notices
of liability in which respondent determined that petitioners, as
transferees of Metro, are liable for $1,946,292.38 of corporate
2(...continued)
exchange, the mean price between the * * * [high and low] trading
prices on a given date is * * * the fair market value for that
date.”), revd. on other grounds 383 F.2d 883 (8th Cir. 1967).
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