David D. Le, a.k.a. David Dung Le, a.k.a. Dung V. Le and Kim Huong Le, a.k.a. Kim Le, et al. - Page 11

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          dividends, return of basis, and long-term capital gain.  On the             
          basis of that analysis, respondent has since conceded that the              
          1990 distributions resulted in dividend income of $124,744 and              
          long-term capital gains of $154,017 and that the 1991                       
          distributions resulted in dividend income of $78,494 and long-              
          term capital gains of $118,579.                                             
          F.  The Les’ Indictment                                                     
               Also during the audit, the Commissioner referred the Les’              
          case to his criminal investigation division (CID).  During the              
          course of the investigation by the CID, neither the Les nor their           
          attorneys challenged petitioner’s reporting position that he                
          operated his medical practice through a corporation named “David            
          Dung Le, M.D., Inc.”.9  Subsequent to this referral, an                     
          indictment was filed against the Les on April 3, 1997, generally            
          charging each of them with:  (1) Two counts (counts 1 and 2) of             
          violating section 7206(1) as to their 1990 and 1991 Federal                 
          individual income tax returns and (2) two counts (counts 3 and 4)           
          of violating section 7206(1) as to DDL’s 1990 and 1991 Federal              
          corporate income tax returns.  See United States v. David Dung Le           
          and Kim Huong Le, Central District of California, Case No. SA CR            
          97-33.  The gist of the indictment was that the Les had willfully           


               9 In fact, we understand petitioners’ counsel, Mr.                     
          Hagendorf, to have first challenged this reporting position in              
          petitioners’ motion for summary judgment filed with the Court on            
          Apr. 25, 2002.                                                              





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