§7203 — Willful failure to file return, supply information, or pay tax

Although these are significant badges of fraud, we are not convinced that even taken together they conclusively establish her fraudulent intent, particularly taking into account her physical abuse and the abusive boyfriend's intrusion into her business and tax matters.

v. Commissioner, 54 T.C. 742, 757 (1970), aff'd, 445 F.2d 985 (10th Cir. 1971). In United States v. Long, 618 F.2d 74, 76 (9th Cir. 1980), the Court ofAppeals held that a Form 1040 containing "false or misleading figures" was a return for purposes ofsec. 7203 (i.e., the criminal section for willful failure to file a tax return). In Conforte v. Commissioner, 692 F.2d 587, 592 (9th Cir. 1982), aff'g in part, rev'g in part 74 T.C. 1160 (1980), the Court ofAppeals held that a Form 1040 that did not

a tax return for purposes ofimposing a frivolous-returnpenalty). 3On briefpetitioner cites United States v. Long, 618 F.2d 74 (9th Cir. 1980), which held that a form containing only zeros constituted a return for purposes of criminal penalties under sec. 7203 for willful failure to file an income tax return. Cf. Oman v. Commissioner, T.C. Memo. 2010-276 n.11 (noting that the position ofthe Court ofAppeals in Long is contrary to the positions ofseveral other Courts ofAppeals that have considered

The Court of Appeals for the Ninth Circuit, to which the present case is appealable, has held that a Form 1040 is a return under the criminal statute, section 7203 (willful failure to file returns), where the document contained all zeros, attached constitutional arguments, and was signed under penalties of perjury.

eld for 10(...continued) and (4) it is executed under penalties of perjury. 11In United States v. Long, 618 F.2d 74, 75 (9th Cir. 1980), the Court of Appeals for the Ninth Circuit held that a return containing only zeros was a return for purposes of sec. 7203 since it contained information relating to the taxpayer’s income from which the tax could be computed. The holding in United States v. Long, supra, represents the minority view that we do not follow in the present case. - 12 - 1997 and 1998

Kantor, charging him with a single count of violating section 7203, in that he willfully and knowingly failed to make at the time required by law an income tax return to the IRS for 1985.

Wilkinson, charging him with violating section 7203 by willfully failing to file timely Federal income tax returns for 1988 through 1990.

failed to report any gross receipts from his aviation activities. On August 13, 1996, petitioner entered into a plea agreement, pleading guilty to one count of willfully failing to supply information on his 1991 Federal income tax return pursuant to section 7203. The plea agreement states that petitioner “admits that the civil fraud penalty and interest applies to whatever additional tax he is deemed to owe after pursuing remaining civil remedies for tax years 1989-1991.” Petitioner was ultimate

On April 14, 1993, petitioner, pursuant to section 7203, was indicted on three counts of willfully failing to file Federal income tax returns for the tax years 1986 through 1988.

District Court for the Western District of Washington charging petitioner, pursuant to section 7203, with willful failure to file 1979 and 1980 Federal income tax returns.

activities, filed false Forms W-4, and did not file tax returns. R determined that P is liable for the addition to tax for fraud for those years. P was convicted of income tax evasion under I.R.C. sec. 7201 for 1986 and willful failure to file under I.R.C. sec. 7203 for 1987. P contends that imposition of the addition to tax for fraud violates his right not to be subject to double jeopardy under the Fifth Amendment of the U.S. Constitution. Held: P is liable for the addition to tax for fraud for

Department of Justice filed an Information against petitioner on charges of willful failure to file a tax return for tax year 2015, in violation of section 7203.9 Information, United States v.

§ 2461(a) expressly provides that “[w]henever a civil fine, penalty or pecuniary forfeiture is prescribed for the violation of an Act of Congress without specifying the mode of recovery or enforcement thereof, it may be recovered in a civil action.” Here, the section 6038(b) penalties at issue are prescribed for the 8 violation of

3 The grand jury also charged petitioner with failing to file an income tax return and failing to pay tax under section 7203 with respect to taxable year 2005.

371 (2006) for acts occurring between 1996 and 2006; seven counts oftax evasion under section 7201 for tax years 2000 through 2006; two counts ofsubscribing a false tax return in violation ofsection 7206(1) for tax years 1998 and 2000; and six counts offailing to file tax returns or supply information under section 7203 for tax years 2001 through 2006.

1987) (noting that the first two elements ofa section 7201 offense are the same as the elements ofan offense under section 7203, which criminalizes any willful failure to pay tax); - 13 - United States v.

Goldsmith was indicted on twelve counts under section 72023 for failing to account for and pay over federal income and FICA taxes withheld from employees for the 1999, 2000, 2001, and 2002 tax years; and four counts under section 7203 for failing to file individual income returns for the 1999, 2000, 2001, and 2002 tax years.

Goldsmith was indicted on twelve counts under section 72023 for failing to account for and pay over federal income and FICA taxes withheld from employees for the 1999, 2000, 2001, and 2002 tax years; and four counts under section 7203 for failing to file individual income returns for the 1999, 2000, 2001, and 2002 tax years.

Criminal Tax Case In 2010 petitioner was indicted by a grandjury for one count each ofviolat- ing section 7212(a) (obstructing administration ofthe internal revenue laws) and - 3 - [*3] section 7201 (attempting to evade or defeat tax) and four counts ofviolating section 7203 (willful failure to file returns for 2003-2006).

1980) (holding that a zero return is not a valid return for section 7203 purposes).

individual income tax return form 1040's but containing no financial data are not tax 'returns' for the purposes ofsection 7203."); United States v.

ded to suggest that the internal revenue laws were self-destructive. Yet, this is precisely what petitioner's argument 67McKeownv. Commissioner, T.C. Memo. 1985-74. 68See, e.e., sec. 6651(a)(1) (imposing a civil addition to tax for failure to file); sec. 7203 (imposing a criminal fine or imprisonment for willful failure to file). - 57 - [*57] comes down to, for ifhe were correct, Congress has supplied every taxpayer with a facile device for totally avoiding all liabilityby simply declaring that

Edelson hid assets by transferringthem to his wife before he filed the invalid returns.4° He was convicted under section 7203 for willful failure to file for the tax years at issue.4¹ The Court ofAppeals upheld the finding offraud under former section 6653(b), stating: "[d]isclosed defiance, standing alone, would not bar a finding offraud."42 The court explained that fraudulent intent "does not require that the taxpayerhide his defiance from the IRS.

They agreed to plead guiltyto three counts ofwillful failure to file tax returns under section 7203 for the taxable years 1999, 2000, and 2001.

They agreed to plead guilty to three counts ofwillful failure to file tax returns under section 7203 for the tax years 1999, 2000, and 2001.

. Commissioner, T.C. Memo. 2010-276; Coulton v. Commissioner, T.C. Memo. 2005-199 (distinguishingUnited States v. Long, 618 F.2d 74 (9th Cir. 1980), which 1 ld that forms with all zeros constituted "returns" for purposes of criminal sanctions under sec. 7203 for willful failure to file). For reasons discussed abovb, the evidence establishes that tax was required to be shown on petitioner's 2007 Federal income tax return. Petitioner has asserted no credible argument and presented no facts that wo

to - 5 - file..a retürn therébyassessing;11imselfcr he 'may' choose not to do so.r(A definition of 'may': can be föurLd in any dictionarý¡)"; and (3) "The onlýpersön÷in the Cbdé required!to file a tax return for-income taxes is the withholding agèni; referred toin Section 1461 and the only Persons referred to in Section 7203 (the Sèction used to erroneously send Per'sóns to.prison) areWithholdingAgent's (See Section 7343)" * * * [áíid] "Petitioñer is not a Withholdiág:Agent referred to in Secti

piracy to defraud the United States in violation of 18 U.S.C. sec. 371, making and subscribing false individual and corporate income tax returns in violation of section 7206(1), and willful failure to file heavy vehicle use tax forms in violation of section 7203. The indictment also charged that Mr. Garavaglia's fraudulent activities began in the latter part of 1988 and continued until April 1992. B. Plea Agreement Mr. Garavaglia subsequently entered into a plea agreement (plea agreement) with t

uired by section. 6303(a).." On a date that -does not appear in the record but which was not later than July 12, 2007, petitioner was chargedain a criminal information with two counts of willfully failing to file tax returns for 2000 and 2001 under section 7203. On- July 12, 2007, petitioner executed aoplea agreement pursuant to rule 11 of the Federal Rules of Criminal Procedure. The plea agreement 4Respondent assessed the additions to tax as follows: Year Amount 1996 $22,400 1997 60,901 1998 65

AO Andreacchi separately reviewed the administrative file in petitioner's case and learned that petitioner had been convicted for failure to file under section 7203 for 1993 and for thre e 2A11 amounts are rounded to the nearest dollar .

In 2004 petitioner was criminally prosecuted for willful failure to file tax returns, in violation of section 7203, for taxable years 1996 through 2002.

1980)," the Court of Appeals for the Ninth Circuit held that in.the context of a criminal prosecution under section 7203," a "The position of the Court of Appeals for the Ninth Circuit that a return containing all zeros constitutes a valid return for purposes of a sec.

Memo. 2005-199, also distinguishes a line of Ninth Circuit cases starting with United States v. Long, 618 F.2d 74' (9th Cir. 1980), which held that a return with all zeros was still a return for purposes of the wilful failure-to file misdemeanor in section 7203. 9 These items of income totaled $231 and appear to have consisted entirely of earned interest. - 20 - correctly reported all of his wages and earnings as well as his name, address, Social Security number, and proper filing status, proper

section 7201 and three; counts of willful failure to make returns or pay taxes under section 7203 for 1992, 1993, and 1994 in the U .S .

Buras has been convicted under section 7203 on four counts of willfully failing to file Federal income tax returns .

. District Court for the District of Maryland returned a seven-count indictment against petitioner--five counts for wire fraud (in violation of 18 U .S .C. section 1343) and two counts for willful failure to file income tax returns (in violation of section 7203) . In August 1997 petitioner was disbarred by the Maryland State Bar . - 5 - Petitioner entered a plea of guilty in an agreement reached on November 7, 1997, to one count of wire fraud and one count of willful failure to file an income t

counts under section 7203 for willful failure to file tax returns in 1993, 1994, and 1996.

- 7 - required to make supplemental quarterly payments of estimated taxes. Sec. 6654(f). Under section 6654(d), the amount of the four quarterly installments (including taxes withheld) generally must equal 90 percent of the tax for the year, or 100 percent of the tax for the preceding taxable year, whichever is less. Where there is an u

- 7 - required to make supplemental quarterly payments of estimated taxes. Sec. 6654(f). Under section 6654(d), the amount of the four quarterly installments (including taxes withheld) generally must equal 90 percent of the tax for the year, or 100 percent of the tax for the preceding taxable year, whichever is less. Where there is an u

for 1995 until 3 years after it was due, and then only after respondent initiated a criminal investigation for the Masons’ failure to file. Petitioner pleaded guilty in May 2000 to willfully failing to file a Federal income tax return for 1995 under section 7203. Respondent determined a deficiency and a fraudulent failure to file addition to tax under section 6651(f) for 1995. Petitioner timely filed a petition with this Court for a redetermination. The parties stipulated that there is a deficie

rom the sale of coal that they failed to report on those returns. See United States v. Hamilton, 128 F.3d 996, 998 n.1 (6th Cir. 1997). Mr. Hamilton was also charged with willfully failing to file a Federal income tax return for 1989 in violation of section 7203. - 5 - Mr. Hamilton was found guilty on all counts and was consequently sentenced to 27 months of imprisonment. Mrs. Hamilton was convicted of willfully filing a false Federal tax return for 1987 but was acquitted of these charges relati

District Court for the Southern District of Ohio, petitioner pleaded nolo contendere to four counts under section 7203 of willfully failing to file Federal income tax returns for 1994, 1995, 1996, and 1997.

- 14 - for section 7203 purposes); United States v.

quirements of the tax law; and (4) it is executed under penalties of penury. In United States v. Long, 618 F.2d 74, 75 (9th Cir. 1980), the Court of Appeals for the Ninth Circuit held that a return containing only zeros was a return for purposes of sec. 7203 since it contained information relating to the taxpayer’s income from which the tax could be computed. The holding in United States v. Long, supra, represents the minority view that we do not follow in the present case. The addition to tax i

enced to imprisonment and fined. In June 1993, the U.S. Court of Appeals for the Sixth Circuit reversed the convictions due to an improper jury instruction. In May 1994, Dr. Alt entered into a plea agreement and pleaded guilty to a misdemeanor under sec. 7203 in exchange for the dismissal of the indictment and commutation of the sentence to time already served. - 9 - Year Dr. Alt Petitioner Total 1997 $13,200 $39,375 $52,575 1998 35,246 105,655 140,901 1999 53,761 83,987 137,748 2000 100,800 74,

ner for crimes connected with his 1988, 1989, and 1990 income tax liabilities. On November 6, 1995, petitioner signed a plea agreement, agreeing to plead guilty to one count of willfully failing to file an income tax return for 1988, in violation of section 7203. Judgment was entered on March 12, 1996. - 8 - The Civil Investigation At the conclusion of the criminal investigation, Revenue Agent Stufflebeam became responsible for resolving petitioners’ civil tax liabilities for the audit years. In

enced to imprisonment and fined. In June 1993, the U.S. Court of Appeals for the Sixth Circuit reversed the convictions due to an improper jury instruction. In May 1994, Dr. Alt entered into a plea agreement and pleaded guilty to a misdemeanor under sec. 7203 in exchange for the dismissal of the indictment and commutation of the sentence to time already served. Former sec. 6013(e)(1) provided: SEC. 6013(e). Spouse Relieved of Liability in Certain Cases.— (1) In general. — Under regulations presc

In an information filed on March 2, 1994, the United States charged petitioner with one count of willfully failing to file an income tax return in violation of section 7203 for 1990.

On June 15, 1996, following an investigation by respondent’s Criminal Investigation Division, petitioner executed a plea agreement wherein he agreed to plead guilty to five counts of violating section 7203 for willful failure to file Federal income tax returns--one count for each of the subject years.2 On January 31, 1997, judgment was entered by the United States District Court for the Western District of Virginia, accepting petitioner’s guilty plea.

In July of 1996, petitioner was tried and convicted of failing to file Federal income tax returns for 1989, 1990, and 1991, in violation of section 7203.5 In August of 1997, respondent was in the process of conducting a civil audit of the joint tax returns petitioner and Mary filed for 1988, 1989, 1990, 1991, and 1994.

351(a) No gain or loss shall be recognized if property is transferred to a corporation by one or more persons solely in exchange for stock (or securities) in such corporation and immediately after the exchange such person or persons are in control (as defined in section 368(c)) of the corporation.

91-380(01), in 1992 convicted petitioner for failure to file tax returns under section 7203 and tax evasion under section 7201.

The Criminal Proceeding On April 14, 1995, a Federal grand jury indicted petitioner with three counts of violating section 7201, attempting to evade or defeat tax, for taxable years 1988, 1989, and 1990, and three counts of violating section 7203, willful failure to file a Federal income tax return, supply information or pay tax, for taxable years 1988, 1989, and 1990.

District Court for the Southern District of California, in which peti- tioner pleaded guilty under section 7203 to failing willfully to file her 1990 tax return.

the Forms 1040 were not acceptable as income tax returns and that he was required to file Federal income tax returns. On July 10, 1991, petitioner was convicted of willful failure to file Federal income tax returns for 1983 and 1984 in violation of section 7203. Petitioner was sentenced to prison, but his sentence was suspended and he was placed on probation on condition that he file income tax returns by December 15, 1991. Petitioner failed to file the returns within that time and, on December

Petitioner's Criminal Case On August 27, 1992, petitioner pleaded guilty to two counts of violating section 7203 (willful failure to file a return, supply information, or pay tax) (a misdemeanor).

Drummond was indicted for and convicted (1) under section 7206(1) of willfully subscribing to and filing a false return for 1983 and (2) under section 7203 for failing to file a return for 1984.

In late 1987, Robert was found guilty on all 137 counts that he was charged with. On May 13, 1988, Robert was sentenced to 13 years imprisonment and fined $940,000 as a result of his convictions. Robert appealed the convictions relating to the tax shelters, but not the convictions for false tax return (for 1980) and for willfully failing

e years in issue. Harris bought, sold, and developed real estate through fictitious business names including Saudi Corp. and Fujimo Corp. On September 21, 1983, Harris was convicted of tax evasion under section 7201 and willful failure to file under section 7203. In the 1970's, petitioner owned an interest in a parcel of real property in northern Florida known as Holiday Isle. He lost it to Southeast First National Bank of Miami because of a foreclosure suit in 1979. In 1981, Harris, acting as S

1997-566 (adjudication of a taxpayer’s liability was not essential to a conviction under section 7203; therefore, a prerequisite to the application of collateral estoppel was not satisfied).

be summoned and testimony to be required; 6. The bond number of all agents who will have access to the information they are demanding. 2 John B. Kotmair was convicted of willfully failing to file income tax returns for 1975 and 1976 in violation of section 7203. See Kotmair v. Commissioner, 86 T.C. 1253 (1986). - 4 - Upon the receipt of the above information and documents, and a meeting is scheduled, please be advised that we will tape record the meeting and be bringing two witnesses to it. Aft

3 under section 7201 and of willfully making and subscribing a false return for the same year under section 7206(1). On the same date, petitioner was convicted by a jury of willfully failing to file returns for 1984, 1985, 1986, 1987, and 1988 under section 7203. The U.S. Court of Appeals for the Ninth Circuit affirmed those convic- tions. After serving a portion of his sentence for the foregoing crimes, petitioner was placed on probation. As one of the conditions of that probation, petitioner w

ecial agents with the CID. On September 9, 1992, petitioner was charged by the United States Attorney for the Eastern District of Michigan with four counts of willful failure to disclose that he had interests in foreign bank accounts in violation of section 7203. On January 29, 1993, - 4 - petitioner, pursuant to a Rule 112 plea agreement, pleaded guilty to one count of violating section 7203 for the 1987 tax year for having willfully failed to disclose on his 1987 tax return that he had interes