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Fraud Penalty
Year Deficiency Sec. 6663(a)
1995 $4,025 $3,019
1996 21,271 15,954
After concessions, the principal issue remaining for
decision is whether petitioner is liable for the civil fraud
penalty under section 6663(a).
FINDINGS OF FACT
The parties have stipulated many facts, which we incorporate
herein by this reference. When he filed his petition, petitioner
resided in Sewaren, New Jersey.
Background
In 1981, petitioner obtained an undergraduate degree in
industrial engineering from Rutgers University. In 1985 he began
working for the Internal Revenue Service as a valuation engineer,
a position that he held during the years at issue. In 2000, as a
result of the troubles described below, petitioner resigned his
position with the Internal Revenue Service.
Fictitious Government Investment Program
Petitioner has been described as a compulsive gambler. On
one of his periodic gambling trips to Las Vegas, Nevada,
petitioner falsely represented to a longtime friend, Roy Kieffer,
and various Kieffer family members (collectively, the Kieffers)
that he could invest money for them in a Federal employee
investment program, called “Stopgap Investments”, with a
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