James J. Coyle - Page 23

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               Mr. Coyle’s testimony about the amount and type of income he           
          received from Regal was at best vague and, at worst, evasive.  We           
          conclude that Mr. Coyle’s testimony was self-serving and lacked             
          credibility.  See Tokarski v. Commissioner, 87 T.C. at 77.                  
               On the basis of the entire record, we conclude that the                
          underpayments of tax due from Mr. Coyle for 1992 and 1993 were              
          due to fraud.  We sustain respondent’s determinations of fraud              
          penalties under section 6663 with respect to Mr. Coyle for 1992             
          and 1993.                                                                   
          4.  Period of Limitations                                                   
          a.  Regal                                                                   
               We have concluded that Regal's underpayments of tax were not           
          due to fraud.  Thus, section 6501(c)(1) does not prevent the                
          running of the periods of limitations with respect to Regal.                
               We look to whether the periods of limitations are open under           
          section 6501(e).  Section 6501(e) extends the period within which           
          the Commissioner must assess an underpayment of tax to 6 years              
          from the date the return was filed.  Section 6501(e) is                     
          applicable if a taxpayer omits from gross income an amount                  
          properly includable which is greater than 25 percent of the                 
          amount of gross income stated in the return.  “Gross income”                
          means, in the case of a trade or business, the total of the                 
          amounts received or accrued from the sale of goods or services              
          (if required to be shown on the return) before reducing it by the           

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