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Petitioner was a lawyer for 20 years. He was disbarred on
October 23, 1991, as a result of his convictions.
Petitioner paid no taxes and filed no return for the audit
year before the issuance of the notice. The additions to gross
income set forth in the notice were reported on information
returns (Forms 1099 or, in the case of Merrill Lynch Pierce
Fenner & Smith, Inc. (Merrill Lynch), an equivalent tax reporting
statement) as follows:
Payor Classification Amount
Merrill Lynch Short-term capital gain1 $27,573
Bank of New York Short-term capital gain1 2,802
First Investors Tax Interest 259
Exempt Fund
Sovran Bank, NA Interest 138
Commonwealth Savings Interest 5
& Loan
Merrill Lynch Dividends 540
Raytheon Co. Dividends 8
National Bank of Gross distribution from 9,022
Washington retirement account
Total 40,347
1 The $27,573 was reported by Merrill Lynch as “gross1
proceeds from dispositions of securities”. Although the
information return from Bank of New York is not in evidence, we
assume it does the same with respect to the $2,802. On the 1988
return, petitioner reported both amounts as short-term capital
gain; i.e., he failed to report other than a zero basis for
either the IBM stock sold by Merrill Lynch or the security sold
by Bank of New York.
On or about May 14, 1997, more than 2 years after the notice
was issued, petitioner filed the 1988 return. On Schedules B,
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