Harold Wapnick - Page 2




                                        - 2 -                                         
                                          Additions to Tax                           
          Year    Deficiency  Sec. 6653(b)       Sec. 6661     Sec. 6654              
          1985   $296,275.88   1$155,784.40      $74,056.47                           
          1986    389,855.00    1169,812.76       97,463.75                           
          1987    387,838.00    1290,878.50                       $119.43             
               1  Plus 50 percent of the interest due on the portion of the           
          underpayment due to fraud under sec. 6653(b)(2) for 1985 and sec.           
          6653(b)(1)(B) for 1986 and 1987.                                            
               The issues for decision are:1                                          
               1.  Whether petitioner failed to report income of $600,515             
          for 1985, $787,080 for 1986, and $1,008,325 for 1987.  We hold              
          that he did.                                                                
               2.  Whether petitioner is liable for additions to tax under            
          section 6661 for substantial understatement of income tax of                
          $74,056.47 for 1985 and $97,463.75 for 1986.  We hold that he is.           
               3.  Whether petitioner is liable for the addition to tax               
          under section 6654 for failure to pay estimated tax of $119.43              
          for 1987.  We hold that he is.                                              






               1  We previously held that petitioner is collaterally                  
          estopped from denying that he is liable for the addition to tax             
          for fraud under sec. 6653(b) for 1985, 1986, and 1987 because he            
          was convicted of attempting to evade or defeat tax in violation             
          of sec. 7201 for those years.  Wapnick v. Commissioner, T.C.                
          Memo. 1997-133; see United States v. Wapnick, 60 F.3d 948 (2d               
          Cir. 1995).  In its opinion, the U.S. Court of Appeals for the              
          Second Circuit indicated that petitioner and his associates at              
          one time prepared the tax returns for an estimated 13 percent of            
          New York City’s taxi drivers.  United States v. Wapnick, supra at           
          950.                                                                        




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