holding that a conviction under section 7206(1), in contrast to a conviction under section 7201, does not operate as collateral estoppel
How later courts described this case
- holding that a conviction under section 7206(1), in contrast to a conviction under section 7201, does not operate as collateral estoppel
- stating taxpayer's conviction, pursuant to section 7206(1), is a factor to be considered in determining fraud
- “[A] conviction for willful falsification, under section 7206(1), while not dispositive, will be one of the facts to be considered in a trial on the merits [as to whether the defendant in the 7206(1) action committed fraud]”.
- discussion of Considne v. United States,645 F.2d 925, 928-931↩ (Ct. Cl. 1981)
Written by the judges who cited it.
The opinion
Kórner, J., dissenting: I respectfully disagree with the conclusion of the majority in this case that petitioner, John T. Wright, is not estopped by his conviction under section 7206(1) to deny that his Federal income tax return for 1978 was false in that he willfully and knowingly omitted income therefrom which he knew should have been reported. That fact was conclusively established by his guilty plea to the indictment under section 7206(1), which contains the specific allegation of willfully and intentionally failing to report income which petitioner knew he should have done. He is thus collaterally estopped to deny that fact in the instant case. Nell v. Commissioner, T.C. Memo. 1982-228 . His guilty plea is as much a conviction as a conviction following a jury trial. Gray v. Commissioner, 708 F.2d 243 , (6th Cir. 1983), affg. T.C. Memo. 1981-1 , cert. denied 466 U.S. _ (1984).
For this reason, I would conclude that there is no issue of material fact in this case as to whether petitioner’s failure to report all his income on his 1978 return was an innocent mistake due to his lack of business acumen. A conviction under section 7206(1) of filing a false return from which income is omitted does not, standing alone, establish the fraudulent intent to evade tax required to support the addition to tax under section 6653(b). However, here the parties have stipulated that petitioner’s willful and knowing omission of income from his 1978 return resulted in an underpayment of tax. In my view, petitioner’s willfully and knowingly filing a false return for the year 1978, combined with the stipulation of the parties that the willful omission of income from that return resulted in an underpayment of tax, establishes the intent to evade necessary to a determination of the addition to tax under section 6653(b). Based on the holdings and discussions in Considine v. United States, 683 F.2d 1285 (9th Cir. 1982); Considine v. United States, 645 F.2d 925 (Ct. Cl. 1981); and Goodwin v. Commissioner, 73 T.C. 215 (1979), I would grant respondent’s Motion for Summary Judgment in this case.