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As indicated, for 1997 and 1998 respondent determined that
the nominee entities, including K & M, constituted mere nominees
of Ahmed personally, and respondent collapsed the nominee
entities into the calculation of Ahmed’s taxable income and
Federal income tax for those years. On the notice of deficiency
mailed to Ahmed for 1997 and 1998, respondent (after disallowing
many claimed expenses) charged Ahmed with all items of income and
all items of expense that respondent determined were allowable
relating to the nominee entities.
Respondent determined that the civil fraud penalty under
section 6663 was applicable to Ahmed for 1995, 1996, and 1997 and
to K & M for 1995 and 1996. Respondent also determined that the
fraudulent failure to file penalty under section 6651(f) was
applicable to Ahmed for 1998 (because, as explained, Ahmed’s 1998
Federal income tax return was not filed with respondent until
after respondent’s notice of deficiency to Ahmed for 1998 had
been issued).
Jeopardy Proceeding
On March 19, 1999, Ahmed cashed a $770,000 check drawn on a
K & M bank account and used the proceeds to purchase a $770,000
cashier’s check payable to himself.
On June 24, 1999, for 1995, 1996, and 1997, and on July 22,
1999, for 1998, respondent made jeopardy assessments against
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