- 9 -
proceedings could continue in federal district court, where there
was a pending receivership involving debtors.”
The receivership was the result of a civil enforcement
action brought by the Securities and Exchange Commission (SEC)
against Alpha Telcom in 2001 in the U.S. District Court for the
District of Oregon. The District Court appointed a receiver in
September 2001 to take over the operations of Alpha Telcom and to
investigate its financial condition. On February 7, 2002, the
District Court held that the pay phone scheme was actually a
security investment and that Federal law had been violated by
Alpha Telcom because the program had not been registered with the
SEC. The U.S. Court of Appeals for the Ninth Circuit affirmed
this decision on December 5, 2003.
Petitioner’s Unreported Income
During 2001, petitioner received proceeds of $146,912.28
from the sale of stocks from his USB PaineWebber brokerage
account. Petitioner also received dividends of $5,982.05 during
2001. Petitioner did not report the stock sales or dividends on
his income tax return for 2001. Respondent has conceded that the
stock sales did not result in taxable gains.
Internal Revenue Service Determinations
The Internal Revenue Service (IRS) disallowed the
depreciation deduction claimed by petitioner because “the
telephone is located in a place that * * * [petitioner did] not
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011