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income from the sale of marijuana; and (2) whether petitioner is
liable for the additions to tax for fraud under section 6653(b).
Petitioners’ 1987 income is also considered in this
proceeding in order to determine the correct amount of a net
operating loss carryback from 1987 to 1985 and 1986. See sec.
6214(b).
Also raised as an issue herein is whether petitioner Martha
McHan is eligibile for relief from joint liability under section
6015. That issue has been severed from the issues tried and
addressed in this opinion.
FINDINGS OF FACT
Petitioners were married in 1966 and remained so as of the
date of trial. At the time the petition was filed in this case,
petitioners were residents of Murphy, North Carolina.
Petitioner’s Drug Trafficking Activities
In 1984 through 1988, petitioner participated in various
transactions involving the illegal purchase and sale of
marijuana. Generally, petitioner purchased the marijuana with
cash from sources in Mexico and Belize and sold the marijuana in
North Carolina for resale by others in Florida and other States.
A number of individuals participated with petitioner in various
aspects of the illegal drug transactions. We focus, as did
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