§7206 — Fraud and false statements

Congress has clearly distinguished the scienter requirement ofsection 6701 from that in other statutes, e.g., section 6694(b) and section 7206(2).

Congress has clearly distinguished the scienter requirement ofsection 6701 from that in other statutes, e.g., section 6694(b) and section 7206(2).

We do not agree with this allegation.

39 [*39] “A taxpayer’s conviction pursuant to section 7206(1) estops him or her from contesting that an underpayment exists for the years at issue in the criminal case.” Laciny, T.C.

On December 23, 2005, petitioner pleaded guilty to two counts offiling false income tax returns pursuant to section 7206(1) for tax years 1997 and 1998.

Underpayment ofTax Petitioner's conviction pursuant to section 7206(1) for filing a false return for 2001 estops him from contesting that an underpayment exists for that year.

We hold that it does not.

Campion was subsequently indicted, pursuant to section 7206(1), for filitig false 2003 and 2004 Federal income tax returns.

Attorney for the Middle District ofFlorida subsequently charged petitioner, pursuant to section 7206(1), with filing a false tax return.' On April 21, 2009, petitioner pleaded guilty to this charge.

Under these circumstances we cannot say that the provisions of section 1.6012-1(a)(5), Income Tax Regs., are arbitrary, capricious, or contrary to the statutory provisions, and we hold that the regulation is valid.

Although a criminal conviction under section 7206 is not dispositive, it provides probative evidence that the taxpayer intended to evade taxes.

Zahedi were indicted and charged, pursuant to section 7206, with filing false Federal income tax returns relating to 1989 through 1992.

District of New York, Case No. 90 Cr. 777 (WK), to one count of making a false statement to the Securities and Exchange Commission, pursuant to 18 U.S.C. sec. 1001, and to one count of filing a false tax return for the taxable year 1986, pursuant to section 7206(1). In his allocution incident to the guilty plea, petitioner stated: In this 1986 federal personal income tax return, I failed to include income in excess of $2.8 million dollars I had received from the sale of securities belonging to m

on for petitioner's termination assessment. The proffer disclosed that petitioner had been indicted in Fort Lauderdale for income tax evasion pursuant to section 7201 for the years 1978 through 1982 and for filing a false return for 1980 pursuant to section 7206(1). The indictment for the latter offense was based on his having indicated on the 1980 return that he did not have an interest in or authority over a foreign bank account during the tax year. The proffer also indicated that part of the

f the execution of tax returns. It affects, as here, the period of limitations. Furthermore, as noted supra, returns must be verified under penalties of perjury. See sec. 6065. Criminal liabilities are affixed to the jurat on tax returns. See, e.g., sec. 7206(1). The requirements of section 1.6012-1(a)(5), Income Tax Regs., ensure that both the civil and criminal liabilities are not circumvented. Under these circumstances we cannot say that the provisions of section 1.6012-1(a)(5), Income Tax Re

Section 7206 provides in pertinent part: Any person who-- (1) Declaration under penalties of perjury.-- Willfully makes and subscribes any return, statement, or other document, which contains or is verified by a written declaration that it is made under the penalties of perjury, and which he does not believe to be true and correct as to every mater

Section 7206 provides in pertinent part: Any person who-- (1) Declaration under penalties of perjury.-- Willfully makes and subscribes any return, statement, or other document, which contains or is verified by a written declaration that it is made under the penalties of perjury, and which he does not believe to be true and correct as to every mater

For example, section 7206(1) provides: Any person who .

Memo LEXIS 557, at *17 (“[A] conviction under section 7206(1) may render a taxpayer’s credibility suspect.”).

On October 18, 2010, pursuant to a plea agreement, he pleaded guilty to two counts of subscribing false Federal income tax returns under section 7206(1) for taxable years 2002 and 2003.

OJ authorized the prosecution and on April 5, 2006, Steven was indicted by a grandjury ofthe U.S. District Court for the District ofMassachusetts on two - 15 - [*15] counts offiling false and fraudulent returns for the years at issue in violation ofsection 7206(1). The indictment alleged that these returns underreported the gross receipts ofNumber One Foundations. One year later, on April 5, 2007, the grandjury returned a superseding indictment against petitioner and Steven for one count ofconsp

Adams was indicted under section 7206(1) for making false statements on his 1999 amended tax return, as well as on his 2000 tax return.

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.

371 (2006), ten counts ofassisting in the preparation offalse tax documents in violation ofsection 7206(2), and one count ofcorruptly endeavoring to obstruct and impede the administration ofthe tax laws in violation ofsection 7212(a).

year 2006, which was filed with the Virgin Islands pursuant to the Internal Revenue Code, Title 26 ofthe United States Code, section 932(c)(4), and was false and fraudulent as to a material matter * * * [i]n violation ofTitle 26, United States Code, Section 7206(2). United States v. Miller, Criminal No. 2013-07, Indictment at 1 (D.V.I. Apr. 4, 2013), ECF No. 1; see also United States v. Auffenberg, Criminal No. 2007-0047- 22 One could argue that the Coffeys' federal-filing obligation might, unde

year 2006, which was filed with the Virgin Islands pursuant to the Internal Revenue Code, Title 26 ofthe United States Code, section 932(c)(4), and was false and fraudulent as to a material matter * * * [i]n violation ofTitle 26, United States Code, Section 7206(2). United States v. Miller, Criminal No. 2013-07, Indictment at 1 (D.V.I. Apr. 4, 2013), ECF No. 1; see also United States v. Auffenberg, Criminal No. 2007-0047- 22 One could argue that the Coffeys' federal-filing obligation might, unde

year 2006, which was filed with the Virgin Islands pursuant to the Internal Revenue Code, Title 26 ofthe United States Code, section 932(c)(4), and was false and fraudulent as to a material matter * * * [i]n violation ofTitle 26, United States Code, Section 7206(2). United States v. Miller, Criminal No. 2013-07, Indictment at 1 (D.V.I. Apr. 4, 2013), ECF No. 1; see also United States v. Auffenberg, Criminal No. 2007-0047- 22 One could argue that the Coffeys' federal-filing obligation might, unde

year 2006, which was filed with the Virgin Islands pursuant to the Internal Revenue Code, Title 26 ofthe United States Code, section 932(c)(4), and was false and fraudulent as to a material matter * * * [i]n violation ofTitle 26, United States Code, Section 7206(2). United States v. Miller, Criminal No. 2013-07, Indictment at 1 (D.V.I. Apr. 4, 2013), ECF No. 1; see also United States v. Auffenberg, Criminal No. 2007-0047- 22 One could argue that the Coffeys' federal-filing obligation might, unde

His first trial ended in a hungjury, but upon retrial thejury in February 2004 con- victed him on both counts. In September 2005 he was sentenced to 24 months' ¹All statutory references are to the Internal Revenue Code in effect at all relevant times, and except as otherwise indicated, all Rule references are to the Tax Court Rules of

-3- [*3] return under section 7206(1); attempting to evade taxes under section 7201; and conspiracy to defraud the Government in violation of 18 U.S.C.

oney was forfeited pursuant to 18 U.S.C. sec. 981(a)(1)(A), which provides for a forfeiture ofproperty involved in a financial transaction (money laundering) with the intent to engage in conduct constituting a violation ofsec. 7201 (tax evasion) or sec. 7206 (fraud/filing false returns). 6The relinquishment was from a prior civil forfeiture pursuant to 18 U.S.C. sec. 981(a)(1)(A). -6- Discussion I. Introduction The whistleblowerprogram is one ofthe weapons used by the IRS to detect underpayments

oney was forfeited pursuant to 18 U.S.C. sec. 981(a)(1)(A), which provides for a forfeiture ofproperty involved in a financial transaction (money laundering) with the intent to engage in conduct constituting a violation ofsec. 7201 (tax evasion) or sec. 7206 (fraud/filing false returns). 6The relinquishment was from a prior civil forfeiture pursuant to 18 U.S.C. sec. 981(a)(1)(A). -6- Discussion I. Introduction The whistleblowerprogram is one ofthe weapons used by the IRS to detect underpayments

This alternative substantiation must be made on the Form 990 return (not a mere receipt) and thus is potentially subject to civil penalties under section 6701 and, since the return is signed "[u]nder penalties ofperjury", the criminal penalties ofsection 7206(1) as well.

nistar account that Mrs. Williams controlled. As a result ofher involvement in Mr. Bagdis' schemes, Mrs. Williams faced criminal charges. She ultimately pleaded guilty to one count offiling a false Federal income tax return for 2001 in violation ofsection 7206(1). In her guilty plea she stipulated that she had also willfully filed false returns for 2000, 2002, and 2003. Following conclusion ofthe criminal proceeding, the IRS examined the joint returns that petitioner and Mrs. Williams filed for

e ongoing criminal investigation relating to petitionerhusband's business. II. Plea Agreement In 2010 the U.S. Attorney's Office (US Attorney) filed an information charging petitioner husband with one count offiling a false tax return in violation ofsection 7206(1). In response, petitioner husbandhired CathrynMatthews, a forensic accountant, to calculate his income and tax liabilities for the years at issue. Ms. Matthews calculated that the business suffered a net loss for 2004 and [*4] had no t

- 38 - [*38] an intent to override or supplantthe § 7701(a)(1) definition ofa "person." To the contrary, § 7343 reads quite naturally as a supplement to or clarification ofthis latter definition: § 7701(a)(1) provides that the term "person" "mean[s] and include[s] an individual, a trust, estate, partnership, association, company or corporation," and § 7343 then builds upon this definition by specifying that it "includes" certain individuals who act on behalfofa corporation or partnership -- ä, "

District Court for the Northern District ofIllinois in which he pleaded guiltyto violating section 7206(1) by knowingly and willfully filing false tax returns for his taxable years 2007 and 2008, respectively.

District Court for the Eastern District of Pennsylvania on two counts ofwillfully filing false tax returns under section 7206 for tax years 2006 and 2007.

Department ofJustice in which he pleaded guilty to a violation ofsection 7206(1), to wit, the filing ofa false individual income tax return for year2000.

In 2001, petitioner was convicted ofcriminal tax evasion under section 7201 with respect to his 1991 tax year and willfully making false or fraudulent statements under section 7206(1) with respect to his 1992, 1993, and 1994 tax returns.

Petitioners' arguments that the notice was based on a report prepared by the IRS Criminal Investigation Division while pursuing an indictment under section 7206(1), a charge that was apparently dropped by the time Mr.

s. In January 2002 Larson entered into a plea agreement with the United States and pleaded guilty to, inter alia, conspiring to defraud the IRS in violation of 18 U.S.C. sec. 371 and subscribing false and fraudulent income tax returns in violation ofsection 7206(1). After ajury trial in 2002 Palmer was found guilty of all charges ofconspiring to defraud the IRS and aiding and assisting in preparing fraudulent returns and was sentenced to prison. On December 12, 2002, respondent issued a notice o

s. In January 2002 Larson entered into a plea agreement with the United States and pleaded guilty to, inter alia, conspiring to defraud the IRS in violation of 18 U.S.C. sec. 371 and subscribing false and fraudulent income tax returns in violation ofsection 7206(1). After ajury trial in 2002 Palmer was found guilty of all charges ofconspiring to defraud the IRS and aiding and assisting in preparing fraudulent returns and was sentenced to prison. On December 12, 2002, respondent issued a notice o

District Court for the Southern District ofNew York charging petitionerwith violation ofsection 7206(1) for willfully subscribing a false tax return for taxable year 1997.

n, perhaps because 90% ofher clients received refunds. Ms. Vaughn pleaded guilty in Federal court on November 28, 2011, to four counts ofaiding and assisting in the presentation ofa false income tax return to the Internal Revenue Service (IRS) under section 7206. Ms. Vaughn admitted in her plea agreementthat she had fabricated material items on tax returns, which created more complex returns and generated refunds so that she could charge her clients higher fees and get recommendations for new cl

Petitioner's guilty plea under section 7206(1) does not prove fraud, but rather respondentmust show that petitioner intended to evade tax in filing the returns.

of knowingly nd willfully aiding and assisting in the pi^eparation and, pre$entation of materially false income tax returns 4df Ålients n violåtion of section 7206 (2) ; (3) three counts of knàwingly nd willfully attempting to tevade taxes during,1986 tl¼rough 1.988 in violation of section 7201; and.

Petitioner' s conviction under section 7206 (1) is also a badge of fraud.

ay infer fraudulent intent from evidence a taxpayer was attempting to defraud another), affd. 519 F.2d 1121 (5th Cir. 1975) . (cid:16)042 Stone engaged in criminal activity as shown by his pleading guilty to filing false tax returns in violation of section 7206 (1) . See, e . g. , Evans v. Commissioner, T. C. Memo. 2010-199 ( tating that pleading guilty to violating sectio 7206 (1) was evidence of fraud); Valbrun v. Commissioner, T.C. Memo. 2004-242 (stating that conviction uáder section 7206(1)

of knowingly nd willfully aiding and assisting in the pi^eparation and, pre$entation of materially false income tax returns 4df Ålients n violåtion of section 7206 (2) ; (3) three counts of knàwingly nd willfully attempting to tevade taxes during,1986 tl¼rough 1.988 in violation of section 7201; and.

§ 7206; that the Code of Federal Regulations provisions dealing with he enforcement of section 7206 concern the Bureau of Alcohol, Tobacco and Firearms (BATF); and that since he had never dealt in anything relating to those matters, 'he was at a loss to see how any of his conduct would come under BATF, or be chargeable unde a provision of law admin

§ 7206; that the Code of Federal Regulations provisions dealing with the enforcement of section 7206 concern the Bureau of Alcohol, Tobacco and Firearms (BATF); and that since he had never dealt in anything relating to those matters, ‘he was at a loss to see how any of his conduct would come under BATF, or be chargeable under a provision of law adm

section 7206(1) On_October, 12, 2001, Evans, represented by counsel, entered-into-a plea agreement-in,.' which he pleaded guilty to the first count'"of the"-indictment and to the information specifically admitting facts establishing his guilt beyond a reasonable doubt . The facts admitted included the following : Huntington Construction, . Inc . wa

Langille, and she pleaded guilty to one count of the indictment : violating section 7206(1) by willfully filing a false tax return for 1994 .

McGaughy for three section 7206(1) counts .

section 7206(1) On_October, 12, 2001, Evans, represented by counsel, entered-into-a plea agreement-in,.' which he pleaded guilty to the first count'"of the"-indictment and to the information specifically admitting facts establishing his guilt beyond a reasonable doubt . The facts admitted included the following : Huntington Construction, . Inc . wa

07-CR-0017 sentenced Doris Stowers of Doris Tax Service in Kouts, Indiana, to imprisonment for up to 24 months for one count of "assisting in the preparation of a false United States individual income to return in violation of Title 26, United States Code, Section 7206(2) ." The indictment shows that for years 2002 and 2003 (the years at issue here) Ms .

Jondahl and Bierschbach both involved convictions for filing a false return under section 7206(1), a conviction that does not prove civil tax fraud under section 6663 .

ederal income tax return for audit and investigation . On October 30, 2002, petitioner was indicted on several criminal charges relating to his 1996 Federal income taxes . it - 4 On July 18, 2003, petitioner pleaded guilty to(cid:127)a felony under section 7206(1). for, filing a false 1996 Federal income tax return . In his plea-agreement petitioner admitted that at the time h e filed his 1996 Federal income tax return he knew his reported tax ti overpayments were false . Petitioner also admitte

The IRS recommended the prosec 4tion of multiple counts under section 7206 (1) and ( 2), as well a 18 U.S .C .

etitioners resided in Wyoming at the time the petition was filed. In 2001, petitioner Lorraine C. Balck (Balck) was charged with and pleaded guilty to a Federal felony of filing with respondent a false 1995 Federal income tax return in violation of section 7206(1). In the criminal tax prosecution of Balck, the indictment alleged that on her and her husband’s 1995 joint individual Federal income tax return, Balck reported a negative taxable income of $41,069 and no “Other income” even though Balc

Prior to trial, Million and Flannery pleaded guilty and agreed to testify for the prosecution. Gricco and McCardell proceeded to trial. The jury found Gricco and McCardell guilty on all counts. The government submitted a sentencing memorandum asserting that the total amount stolen between 1990 and 1994 was $3.4 million and that the tax lo

Goosby was indicted, tried, and convicted of 30 violations of section 7206(2) (willfully aiding and assisting in the preparation of false and fraudulent income tax returns) in 2006, although petitioner's returns for the years at issue were not used as the basis for any counts of the indictment .

On September 20, 1989, DiRicco pleaded guilty to, and was convicted of, violating section 7206(2) for aiding and assisting in the preparation of false tax returns for two of the limited partners in the Lumenetics partnership .

Goosby was indicted, tried, and convicted of 30 violations of section 7206(2) (willfully aiding and assisting in the preparation of false and fraudulent income tax returns) in 2006, although petitioner’s returns for the years at issue were not used as the basis for any counts of the indictment.

Since these were the only allegations that petitioner’s return was false, it was essential to petitioner’s criminal conviction under section 7206 that the jury concluded that to some extent the money deposited in petitioner’s accounts was income to petitioner.

the criminal case United States v. Moran, Criminal Action No. 96-412-1 (E.D. Pa. Aug. 5, 1998). Petitioner was indicted for aiding the filing of false joint tax returns for himself and Ms. McNamara for the taxable years 1989 and 1990 in violation of section 7206(2). On October 23, 1996, petitioner pled guilty to these charges. Petitioner filed a motion to withdraw his guilty plea, which the District Court denied. On February 21, 1997, the District Court for the Eastern District of Pennsylvania e

section 7206(1) by filing a false and fraudulent tax return for each of the taxable years 1994, 1995, 1996, and 1997. On February 28, 2000, Mr. Clinkscale entered into a plea agreement (Mr. Clinkscale’s plea agreement) in which - 4 - he pleaded guilty to, inter alia, the above-described first charge and so much of the above-described second charge

In addition, Butler pled guilty to violating section 7206 for aiding and abetting the - 13 - filing of a false corporate return and willfully underreporting income relating to his 1988 and 1989 tax returns.

Vernon, however, was tried for violating section 7206(1), willfully making and subscribing a return under penalties of perjury that he did not believe to be true and correct as to every material matter, for 1988 and 1989.

Vernon, however, was tried for violating section 7206(1), willfully making and subscribing a return under penalties of perjury that he did not believe to be true and correct as to every material matter, for 1988 and 1989.

In addition, Butler pled guilty to violating section 7206 for aiding and abetting the - 13 - filing of a false corporate return and willfully underreporting income relating to his 1988 and 1989 tax returns.

The criminal investigation culminated in the April 15, 1996, indictment of petitioner on three counts of violating section 7206(1) with respect to his individual Federal income tax returns for taxable years 1989, 1990, and 1991, for willfully making and subscribing false tax - 6 - returns, under penalties of perjury, knowing that he had underreported gross receipts from his accounting firm and had failed to report any gross receipts from his aviation activitie

r tax crimes committed in connection with the sole proprietorship (the criminal investigation). The criminal investigation was resolved by Norman’s pleading guilty to two counts of filing a false income tax return, for 1989 and 1990, in violation of section 7206(1). As a result of his guilty pleas, Norman paid a fine, but he did not serve a prison sentence. In November 1991, Norman organized petitioner to carry on the consulting business. Norman testified that petitioner was - 4 - organized in o

Hoyt be prosecuted under section 7206(2) for aiding and assisting in the preparation of false and fraudulent individual income tax returns for 12 individuals and referred the matter to the Sacramento IRS District Counsel.

The allegations in the indictment related solely to the operation of, and Schedule C reporting of income from, the sole proprietorship for calendar years 1983 and 1984. Neither HIF nor Mrs. Hood was charged in the indictment. After a jury trial in May 1991, Mr. Hood was acquitted on all counts. During its taxable year ended Jun

Petitioner’s acquittal on a criminal section 7206(1) charge does not preclude, under the doctrines of double jeopardy, res judicata, or collateral estoppel, respondent from litigating petitioner’s civil liability for a deficiency in tax and additions to tax for failure to file, negligence, and fraud with respect to the same tax years.

Petitioner’s acquittal on a criminal section 7206(1) charge does not preclude, under the doctrines of double jeopardy, res judicata, or collateral estoppel, respondent from litigating petitioner’s civil liability for a deficiency in tax and additions to tax for failure to file, negligence, and fraud with respect to the same tax years.

holding on this point, we need not consider respondent's alternative determination that petitioners are liable for accuracy-related penalties for the years in issue. 4 See Wilson v. Commissioner, T.C. Memo. 1994-454 (declaring that convictions under sec. 7206 are highly persuasive evidence of intent to evade taxes); Estate of Sawczak v. Commissioner, T.C. Memo. 1993-210 (same). - 16 - To reflect the foregoing, Decisions will be entered pursuant to Rule 155.

One .such worker was subsequently convicted for subscribing false income tax returns under section 7206(1) for 1985, 1986, and 1987 for failing to report income earned as a mason,.including more than $62,000 paid by petitioner.

Hoyt be prosecuted under section 7206(2) for aiding and assisting in the preparation of false and fraudulent individual income tax returns for 12 individuals and referred the matter to the Sacramento IRS District Counsel.

false partnership deductions in violation of 18 2 In 1989, petitioner and Vida Lee divorced. - 4 - U.S.C. section 371 and for willfully aiding or assisting in the preparation or presentation of returns which were false or fraudulent in violation of section 7206(2). The criminal cases against Mr. Kilpatrick and Mr. O'Donnell began in 1982 and continued through December 1989. This included (1) an appeal to the U.S. Court of Appeals for the Tenth Circuit, (2) a grant of certiorari by the U.S. Supre

On September 12, 1991, a Federal grand jury charged Atkinson with violating section 7201 with regard to Atkinson’s 1985 and 1986 individual tax returns and section 7206(1) with regard to petitioner’s corporate tax returns for the taxable periods at issue.

d for 1989 of $10,172. On October 5, 1994, petitioner was convicted of filing a false claim for a Federal income tax refund in violation of 18 U.S.C. 287 (1994) and of making and subscribing a false Federal income tax return for 1989 in violation of section 7206(1). On June 13, 1994, petitioner was sentenced to 30 months in prison for these offenses and was fined $20,000 plus special assessments totaling $250. OPINION The jurisdiction of this Court is limited by statute and attaches only upon th

In January 1996, petitioner was convicted of 14 counts of violating section 7206(2) for aiding and abetting the filing of false income tax returns.

Butcher pleaded guilty to violating section 7206(1) (i.e., to willfully subscribing to a 1985 income tax return that he did not believe to be true and correct as to every material matter).

Although petitioner's conviction does not collaterally estop her from denying fraud, such conviction is one of the facts to be considered. See Wright v. Commissioner, 84 T.C. 636, 643- 644 (1985). Based on the foregoing, we conclude that respondent has satisfied the burden of proving, by clear and convincing evidence, that the entire

raud the Internal Revenue Service (irs) by claiming false partnership deductions in violation of 18 U.S.C. section 371 and for willfully aiding or assisting in the preparation or presentation of returns which were false or fraudulent in violation of section 7206(2). The criminal cases against Mr. Kilpatrick and Mr. O’Donnell began in 1982 and continued through December 1989. This included (1) an appeal to the U.S. Court of Appeals for the Tenth Circuit, (2) a grant of certiorari by the U.S. Supr

corporate income tax returns for fiscal years 1987 and 1988, and under section 7206(1) for filing false U.S.

8 - Respondent adjusted the amounts of the deficiencies in income tax, the additions to tax, and the penalty accordingly. On September 4, 1992, petitioners pleaded guilty and were convicted of subscribing to a false return for 1987, in violation of section 7206(1). OPINION Petitioners do not deny that they had unreported gross receipts from the nursery during the years in issue. They also had unreported interest income during certain of those years. For 1986, they do not dispute that the omitted

Romeyn also pled guilty in 1987 to one count of making material false statements on the Landing 1982 Federal income tax return in violation of section 7206(1); these material false statements consisted, in part, of falsely deducting payments made to R&S as business expenses.

1983), where a taxpayer's conviction for willfully and knowingly making and subscribing tax returns that he did not believe to be true and correct, in violation of section 7206(1), was predicated on the fact that the taxpayer, a dentist, reduced his gross receipts by the value of certain free services to his patients.

- 8 - Goings was indicted under section 7206(1) for two counts of filing false Federal income tax returns for taxable years 1987 and 1988.

e returns for 1984, 1985, 1986, 1987, and 1988. On November 20, 1990, petitioner was convicted by a jury of attempting to evade or defeat tax for 1983 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 ser

On February 4, 1991, petitioner was convicted on multiple counts of Federal income tax offenses for years 1982 and 1983 in violation of section 7206(1) and (2), and conspiracy to defraud the United States in violation of 18 U.S.C.

Wiltzius' Conviction and Plea Agreement On November 10, 1991, Wiltzius pled guilty to violating section 7206(1) (filing a false return) for 1984 and 1985 because he skimmed income from House of Babes which he did not report on his personal income tax returns.

t. 4 Charles was involved with others in the various drug trafficking charges. - 4 - violation of 21 U.S.C. sec. 848. Charles was also charged and found guilty on three counts for filing false tax returns for the years 1985 and 1986 in violation of section 7206(1). Charles was subsequently convicted on the final count and was ordered to forfeit his profits from the illicit activities to the U.S. Government. The District Court found that Charles and the other persons involved in the illegal condu

On April 28, 1992, based upon his guilty plea, petitioner was convicted under section 7206(1) of willfully filing a false 1987 Federal income tax return.

On March 23, 1987, petitioner was indicted in the United States District Court for the Northern District of Illinois on 3 counts of violations of section 7206(1).14 In the indictment, petitioner was accused of filing false individual income tax returns which understated his taxable income for each of the 11Petitioner dated his signature as 6/1/83.

- 10 - income tax evasion under section 7201, filing a false return under section 7206(1), and conspiracy under 18 U.S.C.