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of fraud. Mr. Wright has failed to challenge or explain
successfully why respondent’s showing of underpayment of tax and
fraudulent intent for each of the years in issue is inapplicable
or incorrect. The Court concludes that Mr. Wright is liable for
the civil fraud penalty pursuant to section 6663 for taxable
years 1999, 2000, and 2001. Accordingly, the Court sustains
respondent’s determination on this issue.
V. Conclusion
The Court sustains respondent’s determinations regarding
petitioners’ deficiencies, as adjusted to reflect respondent’s
concessions, for taxable years 1999, 2000, and 2001. Petitioners
failed to include in their taxable income distributions they
received from Wright & Associates that exceeded their stock
basis, as well as $54,000 they deposited in their offshore
account. Mr. Wright was not entitled to a flowthrough deduction
of $50,000 from Wright & Associates for 1999 on account of Ms.
Mohr’s NASD claim. The Court sustains respondent’s determination
that petitioners are liable for the section 6651(a)(1) addition
to tax for 1999 and 2000. The Court also sustains respondent’s
determination that Mr. Wright is liable for the section 6663
civil fraud penalty for 1999, 2000, and 2001.
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