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return also included income from an attached Schedule C, Profit
or Loss From Business, for petitioner’s construction activities.
No such Schedule C was included or construction income shown for
1991.
In January 1997, petitioner was indicted on multiple counts
in the United States District Court for the Eastern District of
Virginia. After trial, petitioner was found guilty on one count
of conspiracy to distribute marijuana and cocaine and on four
counts of filing false tax returns for 1990, 1991, 1992, and
1993, in violation of section 7206(1). The indictment named
various persons as conspirators, including Stephen C. Hatcher
(Hatcher). With respect to the counts concerning section
7206(1), the indictment charged that petitioner:
did wilfully make and subscribe a U.S. Individual
Income Tax Return, Form 1040, for the calendar year
1990 [or 1991, etc.] which was verified by a written
declaration that it was made under the penalties of
perjury and was filed with the Internal Revenue
Service, which said U.S. Individual Income Tax Return,
Form 1040, he did not believe to be true and correct as
to every material matter in that the said U.S.
Individual Income Tax Return, Form 1040, failed to
disclose that he engaged in the operation of a business
activity from which he derived gross receipts or sales
and incurred deductions, whereas, as he then and there
well knew and believed, he was required by law and
regulation to disclose the operation of this business
activity, the gross receipts or sales he derived
therefrom, and the deductions he incurred.
(In violation of Title 26, United States Code, Section
7206(1))
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