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reported taxable income and adjusted gross income as indicated
below, omitting certain amounts of gross income as a result of
Dr. Barranco’s tax evasion scheme and thereby giving rise to
additional tax due, as also indicated below:4
Adjusted
Taxable Gross Gross
Income Income Income Additional
Tax Year Reported Reported Omitted Tax Due
1983 $5,678 * $805,819 $303,565
1984 78,722 * 553,518 189,632
1985 32,678 * 643,356 257,847
1986 47,709 * 521,829 185,239
1987 8,293 $63,407 600,934 180,925
1988 6,932 49,881 467,012 106,855
1989 84,965 124,968 625,858 138,487
1990 100,375 146,371 593,846123,920
1991 –-- 57,027 602,499 153,317
1992 248,397 290,978 464,142 53,938
613,749 732,632*5,878,813 1,693,725
* For 1983-1986, there is no evidence in the record from which the adjusted
gross income reported by petitioner and Dr. Barranco can be determined.
Petitioner neither reviewed these joint income tax returns
nor questioned Dr. Barranco about any entries on them.
V. Dr. Barranco’s Guilty Plea and Incarceration
In May 1995, Dr. Barranco pleaded guilty to conspiring to
defraud the Internal Revenue Service and evade taxes with respect
to his medical practice corporation for the years 1983 through
1992 and to willfully evading taxes on omitted taxable income in
excess of $1 million for the years 1987 through 1992.
4 As far as the record reveals, on the Barrancos’ originally
filed individual income tax returns for the years at issue, Dr.
Barranco’s medical practice earnings were reported, apparently
incorrectly, on Schedule C, Profit or Loss From Business. These
amounts of reported Schedule C earnings were apparently net of
the fraudulent deductions claimed on the corporate returns for
Dr. Barranco’s medical practice corporation.
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