Opinion ID: 2994503
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: During the 1970s, Toushin was a partner in an enterprise that owned and operated several theaters, including the Bijou Theater/1 in Chicago, Illinois. As a result of a dispute among the partners of the enterprise, the assets were placed into receivership from 1976 until 1978 in order that they might achieve a more accurate accounting of the daily receipts and deposits. During this receivership period, Toushin experienced severe financial difficulties--he borrowed money from relatives, was frequently overdrawn on his personal checking account and took a job as a janitor at his in-law’s business. When he gained control of the Bijou theater in 1978, his financial situation began to improve dramatically after he began skimming cash proceeds from the theater./2 As previously mentioned, on August 8, 1991, Toushin agreed to plea guilty to filing a false income tax return for the 1980 tax year. In the plea agreement, Toushin made several admissions: during the calendar year 1980, . . . he received income from skimming cash proceeds from Entertainment and Amusement, Inc., through operation of the Bijou Theater, which additional income he knew he was required to report and which he knowingly did not inform his accountant of, thereby evading inclusion of that cash income on his joint individual tax return for 1980. . . . He agrees that the amount of the unreported skimmed cash income for 1980 totalled [sic] approximately $59,411.35. Based in part on this admission, the IRS levied penalties for fraud and substantial underpayment for the tax years of 1980, 1981 and 1982, and also initiated a civil proceeding against Toushin to recover unpaid taxes for those years. On May 20, 1999, the Tax Court affirmed the IRS’s determination, concluding that the I.R.S. had established by clear and convincing evidence an underpayment of tax for 1980, 1981, and 1982 and that the I.R.S. had clearly and convincingly proven that the entire underpayments of tax for 1980, 1981, and 1982 were due to fraud./3 Toushin v. Commissioner, No. 21724-92, T.C. Memo 1999-171, 1999 WL 317336 (U.S. Tax Ct. May 20, 1999). Toushin appeals.