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petitioner filed a Form 1040X, Amended U.S. Individual Income Tax
Return, for the short taxable year 1995 and the calendar year
1996, attempting to use NOLs initially reported on his 1997
return. During October 2001, petitioner filed amended returns
containing $59 million in increased claims for NOLs.
Petitioner received the following amounts from CBM during
his taxable years ended December 31, 1995, 1996, and 1997:
Taxable
Year Amount
1995 $200,000
1996 1,000,000
1997 925,000
1997 60,000
Petitioner reported the amounts received in 1995 and 1996 as
wages on his Forms 1040, U.S. Individual Income Tax Return. He
did not, however, report as income the amounts he received during
1997 on his original 1997 return. Instead, petitioner attached a
statement to his 1997 return asserting that the amounts he
received from CBM in 1997 belonged to the Benton estate and were
loans from the estate to him. On the statement, he also
maintained that the Benton estate was challenging the
characterization of the payments as compensation, asserting that
they were payments with respect to the stock. Petitioner, in
amended returns for 1995 and 1996, included statements similar to
those included on his 1997 return, asserting that the payments
were erroneously included as compensation and should be properly
characterized as loans from the Benton estate.
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