DocketNumber： Docket No. 8023-11
Citation Numbers： 106 Tax Ct. Mem. Dec. (CCH) 649, 2013 Tax Ct. Memo LEXIS 289, 2013 T.C. Memo. 279
Judges： LARO
Filed Date： 12/9/2013
Status： Non-Precedential
Modified Date： 4/18/2021
Decision will be entered under
LARO, The issues for decision are: (1) whether petitioners failed to report income of $94,669 for 1999, $156,616 for 2000, $213,561 for 2001, $206,192 for 2002, $225,434 for 2003, and $270,020 for 2004. We hold that petitioners did fail to report certain income for all years at issue, but only to the extent stated herein; (2) whether any part of any of petitioners' underpayments of tax for 1999 through 2003 was *290 due to fraud, such that under *281 (3) whether petitioner husband is liable for the fraud penalty for 1999 through 2004. We hold that he is for all years; (4) whether petitioners are entitled to refunds of payments of $45,669 for 2002, $47,381 for 2003, and $31,959 for 2004. We hold that they are not. Petitioners resided in Arizona when they filed their petition. Mr. Abdallah was born in Israel, but has dual citizenship by virtue of his father's American citizenship. In Israel Mr. Abdallah attended high school where he was trained as an electrician. After high school he did not go on to college nor take any courses in bookkeeping. In 1990 Mr. Abdallah came to the United States. While Mr. Abdallah's primary language is Arabic, he also speaks some English and Spanish. Mr. Abdallah is the sole provider for his wife and four children.Supermat #16 In 1991 Mr. Abdallah opened a laundromat which he named Supermat #16 (Supermat). Supermat provided coin-operated *291 self-service laundry machines, dry cleaning services, and wash-and-fold services. In addition to its laundry services, *282 Supermat also sold laundry supplies, phone cards, money grams, and various food items. Mr. Abdallah had an office in the corner of Supermat, which was separated from the rest of the laundromat by a bulletproof window. At that window, customers made all merchandise purchases, dropped off laundry, and paid for dry cleaning and wash-and-fold services. Supermat's regular business hours were 7 a.m. to 10 p.m. In 1996 Mr. Abdallah sold Supermat but reclaimed it shortly thereafter when the purchaser failed to make the purchase payments. With the exception of that brief period, Mr. Abdallah was the sole owner of Supermat. In addition, Mr. Abdallah and an office cleaner who came once a week were Supermat's only employees. Finally, Mr Abdallah maintained bank accounts for Supermat's operations, which were separate from petitioners' personal bank accounts. Mr. Abdallah began cashing checks out of Supermat's corner office in 1998. His customers primarily cashed payroll checks and were primarily of Hispanic descent. At trial Mr. Abdallah explained *292 that these customers could not go to a bank because they did not have valid government-issued identification. Mr. Abdallah further acknowledged that many of his customers may have been illegal immigrants. For his check cashing services Mr. Abdallah charged a .75% fee. *283 For the years at issue Mr. Abdallah cashed millions of dollars' worth of checks, thereby generating substantial fees, which constituted petitioners' primary source of income. Petitioners did not report these fees, which are as follows:*293 Mr. Abdallah maintained bank accounts for his check cashing activity separate from petitioners' personal accounts and separate from Supermat's operating accounts. Every week the bank would deliver a cash shipment to Supermat in an armored vehicle. Mr. Abdallah then deposited the checks that he *284 cashed daily. Mr. Abdallah did not keep records of the checks he cashed, his fees earned, nor any other records for his check cashing activity. For the years at issue, two signs at Supermat advertised Mr. Abdallah's check cashing services. The first sign was directly above the office window through which Mr. Abdallah cashed checks, sold merchandise, and received clothing for dry cleaning. This sign was approximately three feet by two feet, had a yellow background, and advertised check cashing in both English and Spanish in red font. The second sign was on the front door, was approximately the same size as the door, and was also red and yellow. After *294 opening Supermat in 1991 Mr. Abdallah began filing Federal income tax returns. Mr. Abdallah has always relied on an accountant to prepare his returns. Essex Peters is an accountant of 25 years' experience. He is not a certified public accountant (C.P.A.), nor an enrolled agent with the Internal Revenue Service (IRS), nor does he have any other official license that allows him to prepare tax returns. Further, Mr. Peters has no experience or training in forensic accounting. *285 In 2000 Mr. Peters began taking his laundry to Supermat for wash-and-fold services every month. In 2002 Mr. Abdallah learned that Mr. Peters was the accountant for a nearby bar, Patrick's. At the time, having ended his relationship with his prior accountant in 1999, Mr. Abdallah was three years behind in filing his Federal income tax returns. After learning that Mr. Peters was an accountant, Mr. Abdallah hired him to prepare his 1999, 2000, and 2001 Federal income tax returns. In December 2002 Mr. Peters also helped Mr. Abdallah incorporate Supermat as an S corporation called Vuvo, Inc. (Vuvo). Mr. Peters further prepared Mr. Abdallah's 2002, 2003, and 2004 Federal income tax returns, as well as Vuvo's 2003 and 2004 *295 Federal income tax returns. Mr. Abdallah signed the returns Mr. Peters prepared, thereby certifying for each that "[u]nder penalty of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete." Mr. Abdallah's returns for the years 1999 through 2004 reported gross income, income tax, and total tax liability as follows: In addition to his Federal tax returns, Mr. Abdallah also employed Mr. Peters to prepare Supermat's financial statements, City of Tempe sales tax returns, and State of Arizona sales tax returns on a monthly basis starting in 2003. Mr. Abdallah further employed Mr. Peters to prepare his annual State of Arizona income tax returns. To prepare Mr. Abdallah's City, State, and Federal tax returns, as well as Supermat's financial statements, Mr. Abdallah allegedly gave Mr. Peters a box filled with Supermat's bank statements, commission checks from money grams, purchase receipts *296 for laundry supplies, and check stubs for expenses paid. According to Mr. Peters, most of Supermat's expenses were documented by check stubs or bank statements. Every month, Mr. Peters would visit Supermat to drop off his laundry, Supermat's financial statements, and Mr. Abdallah's City and State sales tax *287 returns for a prior month. During these visits Mr. Peters would also pick up a box of Supermat's bank statements and various receipts to prepare the next month's books and records. Mr. Peters returned Supermat's bank statements by attaching them to the financial statements he had prepared. Mr. Abdallah then placed the financial statements and bank records in a binder. While the record is unclear whether Mr. Peters ever returned the various receipts and check stubs to Mr. Abdallah, these records are no longer available. Finally, Mr. Peters admitted that he often drank at Patrick's before making these monthly visits. Before July 2004 Supermat's financial statements did not include petitioners' check cashing income. Mr. Abdallah never told Mr. Peters his fee for check cashing services, nor did Mr. Peters inquire as to the fee even after he learned of the check cashing income. In September 2005 the IRS began a criminal investigation relating to petitioners' 2004 return. On October 13, 2005, Mr. Abdallah was interviewed by IRS Special Agent Ken Hudson and Supervisory Special Agent Iris Bohannon. The interview lasted nearly two hours, and Mr. Abdallah voluntarily answered the IRS Agents' questions. Also during that interview, Mr. Abdallah turned over the binder of *288 financial statements that Mr. Peters had prepared for Supermat in 2003 and 2004. After the interview with the IRS, Mr. Abdallah terminated his business relationship with Mr. Peters. The IRS also interviewed Mr. Peters in October 2005. According to Mr. Peters, the IRS never requested from him a copy of petitioners' records during the October 2005 interview; and because his computer was later stolen, these records were no longer available when the IRS interviewed him again approximately two years later. Mr. Abdallah understood that he could go to prison if convicted of criminal tax fraud. On August 5, 2008, Mr. Abdallah entered into a plea agreement with the Government in order to avoid going to prison and to put an end to the criminal case. In the plea *298 agreement Mr. Abdallah pleaded guilty to violating On December 24, 2008, the U.S. District Court for the District of Arizona entered a judgment and a fine of $ 10,000 against Mr. Abdallah. The judgement provided that Mr. Abdallah "[has] *299 been sentenced in accordance with the terms of the plea agreement and that * * * [he has] waived * * * [his] right to appeal and to collaterally attack this matter." Mr. Abdallah hired Joel Ruben, a C.P.A. with 47 years' experience in accounting and a partner at Pater & Ruben, to prepare his amended returns for 2002, 2003, and 2004. According to Mr. Ruben, the records for those years were "very shallow" and Mr. Abdallah's income and expenses for those years had to be recreated. He also testified that there was no evidence that a system for keeping track of check cashing income had been in place. Mr. Abdallah's amended returns reported taxable income and tax liability as follows: On March 13, 2009, petitioners made voluntary payments of $45,669 towards their 2002 tax liability, $47,381 towards their 2003 tax liability, and $31,959 towards their 2004 tax liability. In late 1998 petitioners purchased a piece of real property on W. Dublin St. in Chandler, Arizona. In early 2000 petitioners purchased *300 another piece of property, on E. Pueblo Ave. in Chandler, Arizona. Petitioners purchased this property for $138,000 and made a downpayment of $7,500. In early 2003 petitioners purchased yet another piece of property, on E. Scorpio Place in Chandler, Arizona. Petitioners purchased this property for $234,384 and made a downpayment of $46,877. In mid-2003 petitioners sold their W. Dublin St. property. In 2002 Mr. Abdallah submitted a "Uniform Residential Loan Application" (Freddie Mac Form 65) to Spectrum Financial Group, in which he reported his *291 monthly income from Supermat as $9,000. In 2003 Mr. Abdallah submitted yet another "Uniform Residential Loan Application" (Freddie Mac Form 65) to Spectrum Financial Group, in which he also reported his monthly income from Supermat as $9,000. In both applications Mr. Abdallah disclosed that he had monthly mortgage payments on his W. Dublin St. property of $852 and additional monthly loan payments of $792. Finally, Mr. Abdallah signed the applications, thereby certifying "that the information provided in this application is true and correct as of the date set forth opposite * * * [his] signature[] on this application" *301 and acknowledging his "understanding that any intentional or negligent misrepresentation(s) of the information contained in this application may result in civil liability and/or criminal penalties including, but not limited to, fine or imprisonment or both under the provisions of Title The primary issue in this case is whether Mr. Abdallah fraudulently underreported his income with regard to his 1999 through 2004 returns. The parties have stipulated or otherwise conceded on brief that Mr. Abdallah failed to report income of $59,349 for 1999, $104,533 for 2000, $146,496 for 2001, $154,655 for 2002, $169,592 for 2003, and $155,702 for 2004. We observe the candor, sincerity, and demeanor of each witness in order to evaluate his testimony and to assign weight to that testimony for the primary purpose of finding disputed facts. During trial we heard the testimony of four fact witnesses: Mr. Peters, Mr. Abdallah, Revenue Agent John Schiffer (Agent Schiffer), and Mr. Ruben. As explained more fully below, we found that Mr. Peters and Mr. Abdallah lacked credibility as to the material issues. Also more fully explained below, we found Agent Schiffer's and Mr. Ruben's testimony to be of limited helpfulness. Therefore, we rely primarily on the record built by the parties through their stipulation of facts and exhibits. As to Mr. Peters, petitioners' accountant, we perceived him to be generally untrustworthy and found his testimony to be incredible with regard to material aspects of this case. Mr. Peters' testimony was internally inconsistent and contradicted by the documentary evidence and stipulated facts. In addition, *303 Mr. Peters demonstrated a lack of understanding of Federal tax laws. We illustrate these observations through the following examples. First, of significance to this case is whether Mr. Abdallah fraudulently underreported income from check cashing. Mr. Abdallah claims that he provided information on check cashing income to Mr. Peters so that Mr. Peters could report petitioners' correct income. Mr. Peters essentially denies this and states that he was, for the most part, unaware that petitioners had substantial check cashing income. Mr. Peters claimed that he never saw any check cashing signs while at Supermat. We find this claim to be highly improbable given the size, prominent location, and prominent color scheme of the two check cashing signs, the regular line of customers outside the check cashing and laundry dropoff window, and Mr. Peters' frequent and regular visits over many years. Further, Mr. Peters noticed that the establishment across the street offered check cashing service but incredibly failed to notice that his own client offered the same service. *294 Second, Mr. Peters testified that he first learned of Mr. Abdallah's check cashing activities in July 2004, when he came across *304 a bank statement from petitioners' check cashing account ending in 4406. However, Schedule C, Profit and Loss from Business, of petitioners' 2003 return shows income from "Phonecards, Moneygrams, [and] Checking Cashing [sic]". When questioned about this, Mr. Peters admitted that he was aware of a small amount of check cashing activity before 2004 and that he saw customers cashing checks as early as 2002. Mr. Peters further testified that after discovering the check cashing account ending in 4406, he began reporting check cashing income in subsequent months, but did not do so for prior months because the July 2004 bank statement showed an opening balance of zero. In reality, the July 2004 bank statement showed an opening balance of nearly $150,000, and prior bank statements from that account showed deposits were made as early as April of 2003. When questioned about the July 2004 opening balance, Mr. Peters admitted that his prior statement had been false, and that although he should have asked for earlier bank statements, he failed to do so. Mr. Peters also claimed that he was not aware of petitioners' other check cashing accounts; however, the bank statement for petitioners' check *305 cashing account ending in 7687 was attached to Supermat's November 2004 financial statements. Finally, Mr. Peters testified that although he knew Mr. Abdallah *295 incurred significant expenses for cash shipments by armored vehicle, Mr. Peters never questioned what those expenses were for. The contradictory and ever-changing nature of Mr. Peters' testimony severely undermines his credibility. Third, Mr. Peters assisted Mr. Abdallah with a dubious method for reducing self-employment taxes. Mr. Peters testified that Mr. Abdallah asked him to incorporate Supermat in order to reduce Mr. Abdallah's Federal tax liability and that he advised Mr. Abdallah that by incorporating Supermat as an S corporation (i.e., Vuvo), Mr. Abdallah would not be required to pay self-employment taxes. Although incorporating and becoming an employee of Vuvo would relieve Mr. Abdallah of filing self-employment tax returns under Finally, the cavalier manner in which Mr. Peters practices accounting does not inspire our confidence in his testimony. Mr. Peters testified that he was not sure whether sales of phone cards were taxable for sales tax purposes and admitted that instead of researching the issue, he merely guessed. Mr. Peters' careless practice *307 further contributes to the numerous errors in the financial statements and tax returns that he prepared. For example, Supermat's July and August 2003 profit and loss statements showed sales of $3,286 and $2,320, respectively, yet its City of Tempe sales tax returns reported sales of only $1,000 and $899, respectively. As another example, Supermat's February 2004 profit and loss statement showed total sales of $4,164, yet its State of Arizona sales tax return reported total sales of only $560. When questioned about these discrepancies, Mr. Peters admitted that he filed the city and State sales tax returns before creating the profit and loss *297 statements and that he merely guessed what the sales amounts would be. For the reasons stated above, we choose not to credit Mr. Peters with reliable testimony. As to Mr. Abdallah, we found portions of his testimony to be incredible as to material aspects of this case. For example, Mr. Abdallah testified that he never looked at his tax returns and that he would just write a check for whatever Mr. Peters told him he owed. We find it highly unlikely that Mr. Abdallah, an experienced businessman who operated a profitable business for *308 many years, signed his returns under penalty of perjury without taking notice of his reported gross income.Other Witnesses As for Agent Schiffer and Mr. Ruben, we found their testimony to be credible but of limited helpfulness. Agent Schiffer's testimony was not helpful because he was neither involved in the investigation nor otherwise personally *298 familiar with the case. Mr. Ruben's testimony was not helpful because his factual knowledge was limited to events that occurred after the years at issue. A central issue in this case is whether the periods of limitations on assessment have expired for the 1999 through 2003 returns. It is undisputed that petitioners omitted substantial income on all five returns *309 such that the six-year limitations period set forth in The issuance of a valid notice of deficiency is an essential prerequisite to the jurisdiction of this Court in a deficiency action. In order to establish liability *310 for the fraud penalty under Petitioners' underpayment of tax arises from their unreported income. In the Court of Appeals for the Ninth Circuit, to which this case is appealable absent the parties' stipulation otherwise, see *300 On the basis of our review of the entire record, we find that respondent has produced sufficient evidence to establish that petitioners did not report income of $59,349 for 1999, $104,533 for 2000, $146,496 for 2001, $154,655 for 2002, $169,592 for 2003, and $155,702 for 2004. For 1999 through 2003 the parties have stipulated the *311 above-stated amounts of unreported income. For 2004 petitioners have admitted, by virtue of their 2004 amended return, that they failed to report $155,702 of income. The parties have also conceded on brief this unreported income amount for 2004. To put things in perspective, for the six years at issue, petitioners reported on their original returns total income of only $106,280, i.e., 12%, of their actual total income of $896,607. On the basis of the parties' stipulations and concessions, we hold that respondent has clearly and convincingly established the underpayment element of The Commissioner must prove by clear and convincing evidence that the taxpayer fraudulently intended to underpay his taxes. In The Arizona District Court judgment, however, also incorporated the terms of the plea agreement, and as part of the plea agreement Mr. Abdallah admitted that he "intentionally underreported [his] income * * * in order to pay less in taxes". Therefore, Mr. Abdallah has admitted to fraud—i.e., that he intentionally underreported income for the specific purpose of evading tax. Since fraud is rarely admitted and the taxpayer's intent is rarely available, fraud may be proven by circumstantial evidence and reasonable inferences drawn from the facts. The intent to conceal or mislead may be inferred from a pattern of conduct. In determining whether a taxpayer had the requisite fraudulent intent, courts have also relied on certain indicia (badges) of fraud. These badges include: (1) understating income; (2) maintaining inadequate records; (3) failing to file tax returns; (4) giving implausible or inconsistent explanations of behavior; (5) concealing assets; (6) failing to cooperate with tax authorities; (7) engaging in illegal activities; (8) attempting to conceal illegal activities; and (9) dealing in cash. Mr. Abdallah cashed millions of dollars' worth of checks totaling $13,988,074 in 1999, $20,736,707 in 2000, $26,713,928 in 2001, $28,751,965 in 2002, and $28,839,442 in 2003. Petitioners admit that they failed to report check cashing income of $59,349 for 1999, $104,533 for 2000, $146,496 for 2001, $154,655 for 2002, and $169,592 for 2003. In contrast, on their original returns petitioners reported income of only $13,883 for 1999, $9,718 for 2000, $9,337 for 2001, $9,217 for 2002, and $34,090 for 2003. To put things in perspective, petitioners reported merely 19% of their income for 1999, 9% for 2000, 6% for 2001, 6% for 2002, and 17% for 2003. Petitioners' omitted income, which completely dwarfs the income that they did report, constitutes strong evidence of fraud. Moreover, Mr. Abdallah certified under penalty of perjury that he reviewed his returns and that to the best of his knowledge his returns were true, correct, and complete.*317 reasons. First, Mr. Abdallah knew that fees generated from his check cashing business were his primary source of income, with which he singlehandedly supported his wife and three children (four children in 2003 and 2004). Second, petitioners made substantial investments, partially with their own funds. For example, in 2000 and 2003 petitioners purchased two pieces of real property for $138,000 and $234,384 and made downpayments of $7,500 and $46,877, respectively, with their own funds. Third, petitioners made monthly *306 mortgage payments of $852—i.e., annual payments of $10,224—on their residence at W. Dublin St. To put things in perspective, during 1999 through 2003 petitioners paid more in mortgage and downpayments alone than they reported as income. Taxpayers are required to keep such records as are necessary for the determination of tax. As we stated earlier, Mr. Abdallah claimed incredibly that he never looked at his tax returns. Mr. Abdallah, however, certified under penalty of perjury that he reviewed his returns and that to the best of his knowledge, his returns were true, correct, *319 and complete. Thus, either he lied to the IRS on his returns or he lied to this Court during trial. Even if we were to credit Mr. Abdallah's testimony that he did not review his returns (which we do not), experience and common sense render it difficult for us to believe that a reasonable person would not have noticed that his reported tax liabilities were orders of magnitude lower than what one would expect from his earnings. For the six years at issue, Mr. Abdallah paid Finally and significantly, Mr. Abdallah submitted loan applications to Spectrum Financial Group in 2002 and 2003 wherein he represented that he was making $9,000 a month—i.e. $108,000 a year—through Supermat. In contrast, Mr. Abdallah submitted tax returns in 2002 *320 and 2003 representing that he made only $9,217 and $34,090 through Supermat, respectively. Strong evidence of fraudulent intent exists where the taxpayer reports substantially higher income on his loan applications than on his Federal income tax returns. Moreover, by signing both applications, Mr. Abdallah twice certified that the information he provided was correct and twice acknowledged that misrepresentations could result in a violation of *309 Having established that Mr. Abdallah knew he was underreporting income, we need not make a great leap to conclude that Mr. Abdallah intended to underpay his taxes. When financial incentives *321 existed for him to report high income, such as on loan applications, Mr. Abdallah reported significant monthly income. When financial incentives existed for him to report low income, such as on his tax returns, Mr. Abdallah reported minimal income. For the foregoing reasons, respondent has clearly and convincingly established that Mr. Abdallah harbored fraudulent intent. Once the Commissioner "establishes that any portion of an underpayment is attributable to fraud, the entire underpayment shall be treated as attributable to fraud, except with respect to any portion of the underpayment, which the taxpayer establishes (by a preponderance of the evidence) is not attributable to fraud." *310 In addition, Mr. Abdallah has failed to establish by a preponderance of the evidence that any portion of any underpayment is not attributable to fraud. Thus, Mr. Abdallah's entire underpayment for each of 1999 through 2004 is attributable to fraud. Finally, because we find that petitioners' returns for 1999 through 2003 were fraudulent, the limitations period on assessment is lifted under Under the tax regime Congress created, "Congress has * * * established a detailed refund scheme that subjects complaining taxpayers to various requirements before they can bring suit." *311 With regard to the Tax Court's overpayment jurisdiction, [I]fthe Tax Court finds that there is no deficiency and further finds that the taxpayer has made an overpayment of income tax for the same taxable year * * * or finds that there is a deficiency but that the taxpayer has made an overpayment of such tax, the Tax Court shall have jurisdiction to determine the amount of such overpayment * * * The existence of deficiencies for 2002, 2003, and 2004 is undisputed. Rather, the parties dispute the existence of an overpayment of tax. Respondent subpoenaed Mr. Peters to compel him to testify at trial. Respondent served Mr. Peters with the subpoena but did not provide petitioners or the Court with proof of service. Petitioners allege that respondent failed to follow the Tax Court Rules of Practice and Procedure, claim resulting prejudice, and seek to strike Mr. Peters' testimony. Respondent argues that he issued Mr. Peters' subpoena in accordance with the Rules. Respondent served Mr. Peters with the subpoena but did not provide proof of service to the Court. We find that respondent violated In reaching our holdings, we have considered all arguments made, and, to the extent not mentioned above, we conclude they are moot, irrelevant, or without merit. To reflect the foregoing,1999 $27,021 $19,898 2000 47,340 35,225 2001 66,722 49,637 2002 59,905 44,929 2003 69,996 52,497 2004 85,479 50,644 1999 $13,988,074 $59,349 2000 20,736,707 104,533 2001 26,713,928 146,496 2002 28,751,965 154,655 2003 28,839,442 169,592 2004 30,542,372 155,702 Total 149,572,488 790,327 1 Although calculating the total amount of checks cashed requires certain credit and debit adjustments to be made to total deposits, these adjustments are negligible and do not detract from demonstrating the sheer magnitude of Mr. Abdallah's check cashing activities. *286 Income tax Total tax 1999 $13,883 -0- $979 2000 9,718 -0- 748 2001 9,337 -0- 1,078 2002 9,217 -0- 1,075 2003 34,090 -0- 503 2004 30,035 -0- 81 Total 106,280 -0- 4,464 *290 Total income Income tax (amended) Total tax (amended) 2002 $166,694 $31,333 $46,206 2003 192,872 32,696 47,632 2004 173,164 26,369 32,040
1. Respondent does not assert the fraud penalty against Mrs. Abdallah.↩
2. Unless otherwise indicated, section references are to the Internal Revenue Code in effect for the years at issue, and Rule references are to the Tax Court Rules of Practice and Procedure.↩
3. Petitioners claimed three children as dependents on their 1999 through 2002 returns and claimed a fourth child on their 2003 and 2004 returns.↩
4. For 1999 through 2001, respondent calculated total deposits by adding together all check deposits in petitioners' check cashing bank accounts. Respondent then determined petitioners' unreported income by applying a .75% fee to the total deposits and adjusting for bank fees and bad checks. For 2002 through 2004 respondent based Mr. Abdallah's total check deposits and unreported income on petitioners' amended 2002, 2003, and 2004 returns, further discussed
5. On his 1999 through 2004 returns Mr. Abdallah reported income of $13,883 for 1999, $9,718 for 2000, $9,337 for 2001, $9,217 for 2002, $34,090 for 2003, and $30,035 for 2004, for total reported income of $106,280. For those same years Mr. Abdallah failed to report check cashing income of $59,349 for 1999, $104,533 for 2000, $146,496 for 2001, $154,655 for 2002, $169,592 for 2003, and $155,702 for 2004, for total unreported income of $790,327.↩
6. Pursuant to
7. The parties agree that the notice of deficiency is timely for 2004.↩
8. By signing the returns, Mr. Abdallah certified that "[u]nder penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete."↩
9. We note that a violation of
10. "[T]his chapter" refers to Chapter 68, Additions to the Tax, Additional Amounts, and Assessable Penalties, to which
11. On brief, respondent concedes these reduced deficiency amounts for 2002, 2003, and 2004.↩
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