Mark N. Wright and Erica Y. Wright - Page 36

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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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