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Background
At the time he filed the petition, petitioner resided in
Castle Rock, Washington. Petitioner graduated in 1975 from
Palmer College of Chiropractic in Davenport, Iowa. Petitioner
formed Toney Chiropractic Center, a sole proprietorship, in 1977
and worked there during the relevant time period.
Petitioner reported taxable income of “zero” on his
individual income tax return for 1986. Petitioner attached to
his Form 1040A, U.S. Individual Income Tax Return, a “summary of
income items”. He estimated that his wages were $20,000, and
noted “due to lost or stolen records, and unavailability of
information this figure is an estimated amount”. Petitioner also
attached to his Form 1040A a note in which he claimed he was not
liable for tax due, as no section of the Internal Revenue Code
imposed a tax upon him. Petitioner submitted tax returns for the
taxable years 1979 through 1985 and 1987 through 1991 containing
similar frivolous arguments and claiming zero tax liability.
By Information dated February 23, 1996, the U.S. Attorney
for the Western District of Washington (U.S. Attorney) charged
petitioner with criminal tax evasion under section 7201 for the
taxable year 1986.
On March 13, 1996, petitioner entered into a plea agreement
with the U.S. Attorney. Petitioner pleaded guilty to one count
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