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travel expenses) and personal matters (e.g., she corresponded
with Mr. Pisano regarding the filing of petitioner’s 1986 through
1989 returns and gave Mr. Pisano copies of petitioner’s
reimbursement expense checks relating to 1988 and 1989).
In the mid-1980s, petitioner established and funded an
account in the name of his friend, Gina M. Oliva (Oliva account).
Petitioner used this account to purchase and sell Stuart-James’
initial public offerings. These trades were against company
policy and in 1986 and 1987 produced capital gain income of
$15,315 and $136, respectively. Petitioner did not disclose the
Oliva account to Mr. Pisano or report the capital gain income on
his 1986 and 1987 returns.
Petitioner, on the Schedule C, Profit or Loss From Business,
accompanying his 1986, 1987, 1988, and 1989 returns, deducted
total travel and entertainment expenses of $33,963, $79,726,
$95,798, and $64,494, respectively. These returns did not
reflect $153,711 of travel and expense reimbursements received
from Stuart-James from 1986 through 1989. In 1989, petitioner
received, but did not report on his 1989 return, a pension
distribution of $105,341.
In 1995, petitioner was indicted for tax evasion, pursuant
to section 7201, relating to 1986 through 1989, and was convicted
of tax evasion relating to 1989. The conviction was subsequently
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