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7201 and 1 year on each of the counts under section 7203, with
all terms running concurrently. Petitioner was also ordered to
pay restitution to 19 individuals.
C. Respondent’s Determinations
Following the criminal investigation, respondent conducted a
civil investigation of petitioner’s 1996 taxable year. Agent Bob
Golub (Agent Golub) conducted the investigation on respondent’s
behalf. Respondent used the bank deposits method to reconstruct
petitioner’s income for 1996. Respondent determined that
petitioner had total unreported income of $1,138,436, as
reflected by the following: (1) Deposits into the Cathay Bank
accounts totaling $369,761; (2) deposits into the Bank of America
account totaling $106,670; (3) withdrawals from the Bona Trust
account totaling $550,000; (4) withdrawals from the Amex
Hospitality account totaling $26,000; and (5) withdrawals from
the Amex Service account totaling $86,005.
On June 21, 2002, respondent mailed petitioner a notice of
deficiency for the tax year 1996. As reflected in the notice of
deficiency, respondent determined that petitioner had an income
tax deficiency of $459,500 and was liable for an addition to tax
under section 6651(f) of $344,625 for fraudulent failure to file.
D. Procedural History
On September 23, 2002, petitioner filed his petition with
this Court contesting respondent’s determinations. The case was
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