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1992, 1993, and 1994 tax years. The understatements of tax,
calculated before the application of net operating losses, as
shown on the amended tax returns for the 1992, 1993, and 1994 tax
years, are $870, $2,813, and $3,580, respectively.
Petitioner has subsequently submitted to the IRS second
amended tax returns for the 1992 and 1993 tax years. The IRS has
not as yet determined whether to accept these second amended
returns. The parties stipulated that these second amended
returns would have the effect of withdrawing the first amended
returns and reinstating petitioner’s returns as originally filed,
showing no understatements of tax for the 1992 and 1993 tax
years.
Petitioner pleaded guilty to violating section 7201 for his
failure to declare $127,512 of income earned in 1994 from CNC.
At petitioner’s plea hearing, petitioner admitted: (1) At the
time he filed his 1992 Federal income tax return, he knew that he
had received approximately $41,600 in total “monthly profit
income” on his CNC investments in 1992; (2) he failed to report
this income on his 1992 return so that he would not have to pay
income tax on that amount; (3) the “tax loss” on the unreported
income was approximately $7,597; (4) at the time he filed his
1993 Federal income tax return, he knew that he had received
approximately $109,663 in total monthly profit income on his CNC
investments in 1993; (5) he failed to report this income on his
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