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Additions to Tax and Penalty
Year Deficiency Sec. 6651(a)(1) Sec. 6663
1991 $14,505 –- $129,158
1992 43,026 2,307 299,461
1993 25,376 6,344 19,032
The deficiencies resulted from disallowed deductions for (1)
commissions, fees, and contract labor expense consisting of
payments to Mr. Fields’ co-conspirators and certain family
members, and (2) travel and entertainment expenses. The notice
of deficiency also provided that the accuracy-related penalty
under section 6662 (for negligence or disregard of rules or
regulations) would apply in the event the fraud penalty did not
apply.
Petitioner’s Counsel
In August 1999, petitioner’s present counsel, Lawrence
Sherlock, notified petitioner and Mr. Fields (who by that time
had divorced) that he could no longer jointly represent them in
view of their conflicting interests with regard to the fraud
issue, as evidenced by the Appeals officer’s June 2, 1999,
settlement offer. Petitioner and Mr. Fields agreed that Mr.
Sherlock would continue to represent petitioner and that Mr.
Fields would retain separate counsel.
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Last modified: May 25, 2011