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section 2 (1994). The District Court fined petitioner $30,000
and sentenced him to 3 years’ probation. In its judgment, the
District Court imposed the maximum fine indicated under the
applicable sentencing guideline range ($3,000 to $30,000) but
departed from the guideline imprisonment range (12 to 18 months)
“based on diminished capacity due to the defendant’s bipolar
disorder.”
Subsequently, petitioner consented to respondent’s
assessment of $224,455 underlying tax liability for 1994 but
disputed respondent’s proposed imposition of a section 6663 civil
fraud penalty. By notice of deficiency, respondent determined
that pursuant to section 6663, petitioner is liable for a fraud
penalty of $167,918 for 1994.
Discussion
Respondent has moved for summary judgment on the ground that
petitioner’s criminal conviction under section 7201 collaterally
estops him from contesting his liability for the fraud penalty
under section 6663(a). Petitioner contends that a finding of
fraud under section 6663 is negated because in his criminal
proceeding the sentencing court found and the Government
stipulated that petitioner committed the offense while suffering
from a diminished mental capacity. On this ground, petitioner
opposes respondent’s motion for summary judgment and has cross
moved for summary judgment.
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Last modified: March 27, 2008