- 5 -
furtherance of Mr. Carcasi’s plan to offset a portion of BIC’s
1992 income with a loss generated by the Fieldses’ corporation,
FFI, Mr. Carcasi prepared the initial 1992 return under the
premise that BIC operated as a division of FFI, rather than as a
sole proprietorship. Accordingly, the Fieldses did not attach a
Schedule C to the initial 1992 return and did not report any
“business income” on line 12 of that return. The Fieldses did
report $100,000 of wage income for Mr. Fields from FFI on line 7
of the initial 1992 return. In addition, FFI made a $300,000
estimated tax payment in December 1992.
Commencement of Respondent’s Examination
In May 1994, respondent commenced an examination of the
initial 1991 return. In March 1995, respondent’s revenue agent
obtained BIC’s 1991 bank statements from Mr. Carcasi. Those bank
statements revealed that Mr. Fields had understated BIC’s 1991
receipts by approximately $500,000. In subsequent conversations
with PCG personnel, the revenue agent learned of the false
invoice scheme and that Mr. Fields was under FBI investigation
for his role therein.2
In at least one interview with the revenue agent, Mr.
Carcasi claimed that petitioner had expressed concern that the
amount Mr. Carcasi had initially planned to report as BIC’s gross
2 Mr. Fields eventually pleaded guilty to one count of
conspiracy to commit mail fraud.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011