James E. Wells - Page 6

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                  no threats, promises, or representations have been                                    
                  made, nor agreements reached, other than those set                                    
                  forth in this Plea Agreement, to cause defendant to                                   
                  plead guilty.                                                                         
                  On June 24, 1994, the United States District Court for the                            
            Northern District of Illinois, Eastern Division, entered an order                           
            and judgment (U.S. District Court judgment) in petitioner’s                                 
            criminal proceeding.  The U.S. District Court judgment in peti-                             
            tioner’s criminal proceeding adjudged petitioner guilty of the                              
            four counts alleged in the superseding information and also                                 
            ordered petitioner “to forfeit the following property to the                                
            United States:  The amount of $65,000 to the United States”.                                
                  On June 18, 1997, respondent issued to petitioner a notice                            
            of deficiency (notice) with respect to his taxable years 1987,                              
            1988, and 1989.  In that notice, respondent allowed no credit                               
            against the deficiencies, additions to tax, and penalty that                                
            respondent determined for those years (amounts due for the years                            
            at issue) for the $65,000 forfeited to the United States pursuant                           
            to the U.S. District Court judgment in petitioner’s criminal                                
            proceeding.                                                                                 
                                               OPINION                                                  
                  Although not alleged in the petition, petitioner took the                             
            position at trial and takes the position on brief that he is                                
            entitled to a $65,000 credit (petitioner’s claimed credit)                                  
            against the amounts due for the years at issue.  In support of                              
            his position, petitioner relies on his testimony at trial that at                           





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