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petitioners owed tax of $2,566 and $6,420.50, respectively.
Petitioner did not submit with his 1990, 1991, 1992, or 1993
return the amount of tax reported as owed.
In December 1992, the Commissioner assigned Michael Cox
(Cox), a revenue officer in the Commissioner’s collection
division, to collect assessed Federal income taxes shown in the
Commissioner’s records to be owed by petitioner. Cox was not
assigned to audit or examine any of the returns underlying those
taxes, nor did he do so. On May 6, 1993, Cox concluded that the
taxes were uncollectible, and he closed the case as such. Cox’s
conclusion was based primarily on his receipt from petitioner of
information on his finances and Cox’s finding at the local
courthouse of no assets recorded in petitioner’s name.
In 1994, John Voorhees (Voorhees), a special agent in the
Commissioner’s Criminal Investigation Division (CID), was told by
a law enforcement agency that it had been informed that Hickey
was selling prescription drugs illegally. Later, in May 1994,
Voorhees spoke to one of the agency’s confidential informants and
was told that petitioners kept a large quantity of narcotics at
their home and lived a lavish lifestyle. The informant told
Voorhees that petitioners had paid for a lavish wedding and
honeymoon in Ireland and that petitioners had primarily used cash
to pay for home improvements (e.g., a Jacuzzi and expensive
windows) and entertainment expenses (e.g., stereo equipment and
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