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material matter. In preparing, signing, and filing
those returns, Petitioner and Schultz knew that the
returns were false and fraudulent as to material
matters.
(c) Throughout the years in issue, Petitioner was
a used car dealer in Louisville, Kentucky, and Schultz
was a Certified Public Accountant in that same city.
(d) The manner and means by which Petitioner and
Schultz sought to carry out the conspiracy to evade
income tax for Petitioner’s tax years in issue included
the willful creation of a fraudulent assignment of a
note receivable. It was further a part of such effort
to evade and defeat Petitioner’s income tax liability
for Petitioner and Schultz to cause this fraudulent
transaction and loss to be reported and carried forward
on Petitioner’s returns. The fraudulent loss amount
was $300,000.00.
(e) In furtherance of their conspiracy Petitioner
and Schultz committed a number of overt acts.
(f) In about 1984, Petitioner sold real estate to
Huber’s, Inc., for a total of $1,500,000.00.
(g) On his return for his 1984 tax year,
Petitioner reported that he had sold the land for
$400,000.00, that his basis in the land was
$440,000.00, and that his loss on the sale of the land
was $40,000.00. He further reported that he sold the
buildings on the land for $1,100,000.00 and was
electing the installment method of reporting that sale,
with the result that he paid no tax on the sale of the
buildings for his 1994 tax year. His election required
that he report as taxable income a portion of all
payments he received on the sale of the buildings.
(h) On the above sale, Huber’s, Inc., paid
Petitioner a $400,000.00 down payment and gave him a
promissory note for $1,100,000.00. Huber’s Inc. made
interest payments on the note until in or about the
year 1986.
(i) In July, 1986, Ken Huber (Huber), president
of Huber’s, Inc., notified Petitioner of its intent to
pay off the $1,100,000.00 note. Petitioner asked Huber
if Huber’s, Inc., would agree to pay off $800,000.00 of
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