Court Opinion

ID: 4337475
Source: CourtListenerOpinion
Date Created: 2018-11-14 03:23:33.038064+00
Date Added: 2024-06-11T14:47:49.020630
License: Public Domain

T.C. Memo. 2009-44

                UNITED STATES TAX COURT

           WALTER C. ANDERSON, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 20364-07.             Filed February 24, 2009.

     P filed timely tax returns for 1995 through 1999.
He was later charged with tax evasion under I.R.C. sec.
7201 for all five years. By agreement P pleaded guilty
as to 1998 and 1999, and the charges for 1995 to 1997
were dismissed. By a notice of deficiency issued in
July 2007, R determined deficiencies and fraud
penalties for all five years. R sought from the
District Court the information previously submitted to
the grand jury, by a motion in which R argued that the
information was “needed” to sustain the deficiency
determinations. P filed a petition in this Court in
which he asserted that the facts in all five years were
the same, and that he was innocent of fraud in all five
years. P moved for summary judgment, arguing that the
deficiency determinations were invalid since R lacked
the information “needed” to sustain them. R cross-
moved for partial summary judgment on the issue of P’s
fraud for all five years.

     Held: R’s notice of deficiency was valid,
notwithstanding R’s lack of the grand jury information.
                                - 2 -

          Held, further, P’s conviction for tax evasion
     under I.R.C. sec. 7201 for 1998 and 1999 collaterally
     estops him from denying civil fraud for those years for
     purposes of the statute of limitations, see I.R.C.
     sec. 6501(c)(1), and the fraud penalty, see I.R.C.
     sec. 6663(a).

            Held, further, notwithstanding P’s assertion that
     the   facts for all five years at issue were the same,
     P’s   conviction of tax evasion for 1998 and 1999 does
     not   collaterally estop him from denying civil fraud for
     the   prior years 1995 through 1997.

     Walter C. Anderson, pro se.

     John C. McDougal, for respondent.

                         MEMORANDUM OPINION

     GUSTAFSON, Judge:    Petitioner Walter C. Anderson was charged

with tax crimes for each of the five years 1995 through 1999.    He

pleaded guilty and was convicted for only the last two of the

years, 1998 and 1999, and by agreement the charges as to the

prior three years were dismissed.    The Internal Revenue Service

(IRS), issued to Mr. Anderson a statutory notice of deficiency

pursuant to section 6212,1 showing the IRS’s determination of the

     1
      Unless otherwise indicated, all citations to sections refer
to the Internal Revenue Code of 1986 (26 U.S.C.), as amended, and
all citations to Rules refer to the Tax Court Rules of Practice
and Procedure.
                              - 3 -

following deficiencies in income tax2 and accompanying fraud

penalties under section 6663 for all five years:

         Tax Year          Deficiency        Sec. 6663 Penalty
           1995            $ 386,344               $ 289,758.00
          1996             2,012,045               1,509,033.75
           1997           36,490,421           27,367,815.75
           1998           50,022,418           37,516,813.50
           1999           94,868,390           70,993,002.00

     Mr. Anderson petitioned this Court, pursuant to

section 6213(a), to redetermine those deficiencies.    The case is

now before the Court on petitioner’s and respondent’s

cross-motions for summary judgment pursuant to Rule 121.    The

issues for decision are (1) whether Mr. Anderson is entitled to

summary judgment on all disputed issues because (he contends)

sufficient evidence is lacking to support respondent’s notice of

deficiency and pleadings; and (2) whether instead respondent is

entitled to partial summary judgment3 because Mr. Anderson’s

     2
      As is set out more fully below, over 99 percent of these
deficiencies are attributable to the income of Gold & Appel
Transfer, S.A. (Gold & Appel), a British Virgin Islands
corporation, which Mr. Anderson controlled for purposes of
Federal securities law. Respondent alleges that Gold & Appel is
a “controlled foreign corporation” within the meaning of section
957, and that Mr. Anderson must therefore recognize a pro rata
share of Gold & Appel’s so-called subpart F income pursuant to
section 951.
     3
      Respondent seeks summary judgment for all five of the tax
years at issue (i.e., both the years for which he pleaded guilty
and the three prior years for which the charges were dismissed),
                                                   (continued...)
                               - 4 -

guilty plea to criminal tax evasion under section 7201 with

respect to tax years 1998 and 1999 collaterally estops him from

contesting that he fraudulently underpaid his income taxes in all

five of the tax years at issue.    Mr. Anderson’s motion will be

denied, and respondent’s motion will be granted as to 1998 and

1999, but not as to 1995 through 1997.

                            Background

     The following facts are not in dispute and are derived from

the pleadings and the parties’ motion papers, the supporting

exhibits attached thereto, and the opinions in United States v.

Anderson, 491 F. Supp. 2d 1 (D.D.C. 2007), affd. in part and

revd. in part 545 F.3d 1072 (D.C. Cir. 2008).

Mr. Anderson’s business activity

     During the tax years at issue, Mr. Anderson was a

telecommunications entrepreneur and venture capitalist who was

actively involved in the operation of several international

companies.   Two of these companies are central to the dispute

between the IRS and Mr. Anderson: (i) Gold & Appel, which was

formed in 1992 as a British Virgin Islands corporation by Icomnet

S.A. (Icomnet), another British Virgin Islands corporation that

was subject to Mr. Anderson’s control; and (ii) Iceberg

     3
      (...continued)
but only as to the issue of whether Mr. Anderson fraudulently
underpaid his income taxes, not as to the actual amounts of tax
deficiency and fraud penalty.
                               - 5 -

Transport, S.A. (Iceberg Transport), which was formed in 1993 as

a Panama corporation by Mr. Anderson under the alias of “Mark

Roth”.   In 1993 Icomnet held 100 percent of the outstanding

shares of Gold & Appel, and Mr. Anderson held 100 percent of the

outstanding shares of Iceberg Transport.   Later in 1993, Mr.

Anderson caused Icomnet to transfer all of its shares of Gold &

Appel to Iceberg Transport.4   Afterwards, from 1995 through 1999,

Gold & Appel generated hundreds of millions of dollars in income.

     Aside from the above, many facts with respect to the

ownership of Gold & Appel and Iceberg Transport are disputed.

Mr. Anderson alleges that he formed the Smaller World Trust in

1993 as a British Virgin Islands trust--the assets of which were

subject to his management control--and simultaneously transferred

all of his shares of Iceberg Transport, then the parent

corporation of Gold & Appel, to the Smaller World Trust.    Though

Mr. Anderson acknowledges that he continued to control Gold &

     4
      Respondent’s answer states that Mr. Anderson caused Icomnet
to transfer its shares of Gold & Appel to Iceberg Transport in
1993. In his petition Mr. Anderson refers to Iceberg Transport
as Gold & Appel’s “parent corporation”, and in his memorandum in
support of his motion for summary judgment, Mr. Anderson states
that he ceased to be the owner of Gold & Appel in 1993. However,
in his pleadings Mr. Anderson repeatedly states that he caused
the shares of Gold & Appel to be transferred to the Smaller World
Trust. We do not find this claim to be inconsistent with
respondent’s claim that the shares were transferred to Iceberg
Transport, because Mr. Anderson alleges that Iceberg Transport
was also an asset of the Smaller World Trust, and under that
assumption, a transfer to Iceberg Transport would be tantamount
to a transfer to the Smaller World Trust.
                               - 6 -

Appel for purposes of Federal securities law via his management

control of the Smaller World Trust, he maintains that he ceased

to be the true beneficial owner of Gold & Appel for Federal tax

purposes after the alleged transfer to the Smaller World Trust.

Instead, Mr. Anderson alleges that the Smaller World Trust was

the true beneficial owner of Gold & Appel for the tax years at

issue.   Mr. Anderson further alleges that the Smaller World Trust

(i) was a valid irrevocable trust, the ownership or income of

which is not attributable to him pursuant to sections 671 to 679,

and (ii) was a valid charitable trust, which had no income tax

liability.

     In contrast, respondent (i) disputes the existence of the

Smaller World Trust,5 (ii) alleges that Mr. Anderson was the true

beneficial owner of Gold & Appel because he retained an option to

purchase 99 percent of Gold & Appel’s equity for nominal

consideration; and (iii) alleges that Mr. Anderson was the true

beneficial owner of Iceberg Transport because he retained 100

     5
      In Mr. Anderson’s criminal case, the prosecution disputed
the existence of the Smaller World Trust. Respondent’s answer
admitted that Mr. Anderson formed the Smaller World Trust in
1993, and Mr. Anderson subsequently cited this admission as
evidence that the facts before this Court are materially
different from the facts in his criminal case and, therefore,
collateral estoppel should not apply. In response, respondent
moved for leave to amend the answer to deny the existence of the
Smaller World Trust, stating that the prior admission was in
error because the prosecution in Mr. Anderson’s criminal case had
evidence that the formation documents of the Smaller World Trust
were backdated. We granted respondent’s motion for leave to file
amendment to answer by our order dated October 9, 2008.
                                 - 7 -

percent of the outstanding shares of Iceberg Transport in the

form of so-called bearer shares (i.e., an unregistered form of

stock certificates that do not identify the owner but confer

ownership on whoever possesses them) that were sent to a private

mailbox of Mr. Anderson’s in the Netherlands.   Respondent further

alleges that Mr. Anderson’s creation of Gold & Appel and Iceberg

Transport in the British Virgin Islands and Panama, which are tax

haven jurisdictions with financial secrecy laws and practices,

and his use of bearer shares, aliases, and private mailboxes,

among other things, were fraudulent acts that were performed with

the intent to evade tax.

The examination and indictment

     For each of the five years 1995 through 1999, Mr. Anderson

filed income tax returns.   He filed the return for each year in

the succeeding year, and he filed the latest of them (for 1999)

in October 2000.6

     The IRS conducted an investigation of Mr. Anderson, Gold &

Appel, and related entities.   The IRS’s investigation culminated

in Mr. Anderson’s being indicted in February 2005 for one count

of corruptly obstructing, impeding, and impairing the due

administration of the internal revenue laws under section

7212(a), five counts of criminal tax evasion with respect to tax

     6
      Mr. Anderson filed his return for 1995 on April 15, 1996;
for 1996 on June 21, 1997; for 1997 on August 31, 1998; for 1998
on September 30, 1999; and for 1999 on October 19, 2000.
                                 - 8 -

years 1995 through 1999 under section 7201, and six counts of

fraud in the first degree in violation of D.C. Code sec. 22-

3221(a) (2001).     The record before us does not include a complete

copy of the indictment7 but includes only the text of the

following two counts in a superseding indictment filed in

September 2005 (as to which two counts, as we explain below, Mr.

Anderson later pleaded guilty):

     COUNT FIVE

     Tax Evasion 1998

     42.   Paragraphs 1 through 18, 21 through 31, 33, 35,
           and 36 of this Indictment are hereby realleged and
           incorporated as if fully set forth herein.[8]

     43.   From on or about January 1, 1998, through on or
           about September 30, 1999, in the District of
           Columbia and elsewhere, ANDERSON did willfully
           attempt to evade and defeat a large part of the
           income tax due and owing by him to the United
           States for the tax year 1998 by various means,
           including but not limited to the following:

           a)     filing and causing to be filed a false and
                  fraudulent 1998 United States Individual
                  Income Tax Return, wherein he falsely stated
                  that his total income was $67,939 and that
                  the total tax due and owing thereon was $494,

     7
      Our record does include the prosecutor’s reading or
paraphrasing of the indictment at the sentencing hearing.     See
infra p. 13.
     8
      Presumably, the paragraphs incorporated by reference into
Counts Five and Six include facts about Mr. Anderson’s ownership
and control of Gold & Appel and the related entities, but those
paragraphs are not in the record now before us. The record does
include the transcript of the hearing of September 8, 2006 (when
Mr. Anderson entered his guilty plea), at which (at 18-27) the
prosecutor read from or paraphrased portions of the indictment.
                     - 9 -

     whereas, as he then and there well knew and
     believed, his total income was substantially
     greater than what he reported and a
     substantial additional tax was due and owing
     to the United States. Specifically, he
     failed to report the following additional
     items of income in the following approximate
     amounts:

     (i)   $126,303,951 Subpart F investment-type
           income from G&A [Gold & Appel]; and

     (ii) $24,760 interest income from Barclays
          Bank.

b)   failing to notify the IRS, as required by
     law, on a Schedule B of the 1998 United
     States Individual Income Tax Return of his
     signature authority and control of the G&A,
     ANDERSON 1 and ANDERSON 2 accounts at
     Barclays Bank;

c)   failing to file the required Form TD-F, The
     Report of Foreign Bank and Financial Account,
     with the Department of the Treasury to report
     his control of G&A, ANDERSON 1 and ANDERSON 2
     accounts at Barclays Bank;

d)   operating his business affairs in a manner
     designed to conceal his ownership and control
     of G&A and Iceberg during tax year 1998,
     through various means, including but not
     limited to the following:

     (i)   directing nominees to create and sign
           documents of G&A and Iceberg;

     (ii) engaging corporate service centers to
          receive mail addressed to G&A and
          Iceberg; and

     (iii)making or causing to be made false and
          fraudulent statements regarding the
          ownership and control of G&A and
          Iceberg;

In violation of Title 26, United States Code,
Section 7201.
                           - 10 -

COUNT SIX

Tax Evasion 1999

44.   Paragraphs 1 through 18, 21 through 31, and 33
      through 36 of this Indictment are hereby realleged
      and incorporated as if fully set forth herein.

45.   From on or about January 1, 1999, through on or
      about October 19, 2000, in the District of
      Columbia and elsewhere, ANDERSON did willfully
      attempt to evade and defeat a large part of the
      income tax due and owing by him to the United
      States for the tax year 1999 by various means,
      including but not limited to the following:

      a)    filing and causing to be filed a false and
            fraudulent 1999 United States Individual
            Income Tax Return, wherein he falsely stated
            that his total income was $3,324,179, and
            that the total tax due and owing thereon was
            $458,370, whereas, as he then well knew and
            believed, his total income was substantially
            greater than what he reported and a
            substantial additional tax was due and owing
            to the United States. Specifically, he
            failed to report the following additional
            items of income in the following approximate
            amounts:

            (i)   $238,561,316 Subpart F investment-type
                  income from G&A;

            (ii) $400,629 income from Esprit;

            (iii)$16,822 interest income from Barclays
                 Bank; and

            (iv) $133,348 capital gain income;

      b)    failing to notify the IRS, as required by
            law, on a Schedule B of the 1999 United
            States Individual Income Tax Return of his
            signature authority and control of the G&A,
            ANDERSON 1 and ANDERSON 2 accounts at
            Barclays Bank;
                                - 11 -

          c)     failing to file the required Form TD-F, The
                 Report of Foreign Bank and Financial Account,
                 with the Department of the Treasury to report
                 his control of G&A, ANDERSON 1 and ANDERSON 2
                 accounts at Barclays Bank;

          d)     operating his business affairs in a manner
                 designed to conceal his ownership and control
                 of G&A and Iceberg during tax year 1999,
                 through various means, including but not
                 limited to the following:

                 (i)   directing nominees to create and sign
                       documents of G&A and Iceberg;

                 (ii) engaging corporate service centers to
                      receive mail addressed to G&A and
                      Iceberg; and

                 (iii)making or causing to be made false and
                      fraudulent statements regarding the
                      ownership and control of G&A and
                      Iceberg;

          In violation of Title 26, United States Code,
          Section 7201.

Mr. Anderson’s confinement

     Mr. Anderson was incarcerated for the entire pendency of his

criminal case.    He was originally confined in a “more modern

facility” (not specified in our record).    However, he was

transferred to the District of Columbia jail after the first

facility determined that he was unmanageable because he had

violated facility rules.    Among other violations, he possessed a

cell phone.    Mr. Anderson alleges--and both respondent and the

trial judge in his criminal case agree--that the conditions in

the D.C. jail are very poor.    At his later sentencing hearing,

the judge called those conditions “scandalous”.
                             - 12 -

Mr. Anderson’s September 2006 guilty plea and conviction

     Mr. Anderson’s prosecution ended with a conviction, based on

his guilty plea, entered on September 8, 2006, to the two counts

(quoted above) alleging criminal tax evasion under section 7201

with respect to tax years 1998 and 1999.    Mr. Anderson also

pleaded guilty to one count of fraud in the first degree under

D.C. Code sec. 22-3221(a), and the remaining charges in the

superseding indictment were dismissed.   Under the guilty plea,

Mr. Anderson and the Government agreed (i) on a maximum term of

imprisonment of ten years; (ii) that the District Court is

obligated to calculate and consider, but is not bound by, the

2001 United States Sentencing Guidelines (2001 Guidelines); (iii)

that the Federal tax loss exceeded $100 million for the purpose

of calculating a sentence under the 2001 Guidelines; and (iv)

that the court may order restitution pursuant to 18 U.S.C. sec.

3572 and D.C. Code sec. 16-711 (2001).     United States v.

Anderson, 545 F.3d 1072 (D.C. Cir. 2008).

     In the course of taking Mr. Anderson’s guilty plea, the

District Court judge asked him a series of questions to ensure

that Mr. Anderson understood the effect of his plea.    The

exchange included the following:

          THE COURT:     Do you understand that in order for
     me to accept the plea, you’re going to have to
     acknowledge your guilt and acknowledge that you’ve
     engaged in certain conduct that makes up the elements
     of each of the offenses to which you’re pleading
     guilty?
                                  - 13 -

            THE DEFENDANT: Yes.

The judge summarized the three counts to which Mr. Anderson was

pleading guilty (including Counts Five and Six), and then asked--

          THE COURT:     * * * Do you understand those
     three specific charges, Mr. Anderson?

            THE DEFENDANT: I do.

          THE COURT:     And you’ve discussed them and the
     plea to each of those charges in-depth with your
     lawyers?

          THE DEFENDANT: Yes. However, we don’t agree with
     all of the allegations of the government, but I am
     agreeing to plead guilty to those charges. [Emphasis
     added.]

        *        *       *          *       *       *       *

          THE COURT:     I need to ask you, has anyone
     threatened you or anyone close to you, or forced you in
     any way to decide to enter this plea of guilty?

          (Ms. Peterson [defense counsel] conferred with the
     defendant)

            THE DEFENDANT: No, no one has.

The prosecutor read or paraphrased a substantial portion of the

indictment (covering ten pages of the hearing transcript), and

asserted facts about Mr. Anderson’s dealings not just in 1998 and

1999 but beginning as early as 1992.       The prosecutor’s recitation

included the following assertion:

     Between 1995 and 1999 Mr. Anderson used the assets of
     Gold and Appel and Iceberg, which included the profits
     realized from these three telecommunication
     corporations, to invest in other business ventures.

          Mr. Anderson successfully generated more than
     $450 million in earnings for Gold and Appel and Iceberg
                                - 14 -

     during this period. Mr. Anderson did not report these
     earnings as required by law on his United States and
     District of Columbia income tax returns for 1995
     through 1999.

          As a result, Mr. Anderson evaded more than
     $200 million in Federal and District of Columbia income
     tax returns.

The prosecutor then read particular assertions as to 1998 and

1999.     Defense counsel then made a statement that included the

following:

          MS. PETERSON: Your Honor, Mr. Anderson does not
     concede that every fact contained within the indictment
     is accurate * * *.

             However, he admits that over the years he retained
        control over the assets, and was required under U.S.
        law to pay taxes on the gains from those assets.
        [Emphasis added.]

Counsel made further specific admissions as to 1998 and 1999 and

then stated:

        Mr. Anderson further concedes that for purposes of
        computing his sentencing guideline range, the
        government could prove that the total tax loss was in
        excess of $100 million.

The Court then addressed Mr. Anderson directly:

             THE COURT:     All right. Mr. Anderson, you’ve
        heard what the government said, and you’ve heard what
        Ms. Peterson said about what you acknowledge and admit
        and concede. Do you agree with everything that
        Ms. Peterson said?

             THE DEFENDANT: Yes, I do agree with Ms. Peterson’s
        statement.

           *       *       *       *       *       *       *
                                  - 15 -

          THE COURT:     * * * Are you pleading guilty to
     these three offenses voluntarily and because you are
     guilty of each of them?

            THE DEFENDANT: Yes.

        *        *       *          *      *    *       *

          THE COURT:     * * * I find that your plea of
     guilty is a knowing and voluntary plea supported by an
     independent basis in fact containing each of the
     essential elements of the three offenses * * *. I will
     accept your plea of guilty to these three counts, and
     enter a judgment of guilty on those pleas.

     Defense counsel then asked that Mr. Anderson be released

pending sentencing.   In the course of her argument--again, made

in this same hearing, immediately after the court had accepted

Mr. Anderson’s guilty plea--his counsel asserted that the

conditions of his confinement had been “deplorable”, that the

indoor temperature of the un-air-conditioned facility approached

120 degrees, and that he had “served a number of months in

solitary confinement”, had been “denied access to his attorneys a

great deal of the time”, and had been “denied medical care”.    The

prosecutor opposed the request for release pending sentencing,

and her comments included the following:

          As Your Honor remembers, Mr. Anderson has not been
     a model prisoner. Some of the reasons why his
     experiences have been the way they have been was his
     own making. Mr. Anderson was placed in a different
     facility, not the D.C. Jail, by request of the Court,
     and he chose to violate not only their rules, he chose
     to violate the law. As the Court recognized and the
     Court heard the fact that contraband had been brought
     into CTF for Mr. Anderson, which included a cell phone
     that had Internet service, long distance, overseas
     capacity, the Court said I’ve had people in front of me
                              - 16 -

     in this courtroom who were found guilty of offenses
     like that, that was a crime. So I understand that he
     has not had an easy time in the D.C. Jail, but that is
     because of what he did.

The District Court denied the request for release and scheduled

the sentencing hearing.   At the September 2006 hearing at which

Mr. Anderson pleaded guilty, neither Mr. Anderson, nor his

counsel, nor the judge made any suggestion that the conditions of

his confinement affected the voluntary nature of his plea.

The March 2007 sentencing hearing

     Mr. Anderson’s sentencing hearing took place over several

days in March 2007.   At that hearing,

     The government presented evidence by three expert
     witnesses concerning the amount of income received by
     Mr. Anderson during 1998 (Count 5) and 1999 (Count 6),
     and the calculation of taxes not paid to the United
     States and the District of Columbia governments. The
     government’s experts testified that in 1998 and 1999
     Mr. Anderson failed to report $365,484,654 in income on
     his federal and D.C. tax returns. According to those
     experts, the total amount of unpaid federal taxes for
     1998 and 1999 was $140,587,613. The government’s
     experts further testified that Mr. Anderson defrauded
     the D.C. government of taxes during 1999 (Count 11) in
     the amount of $22,809,032. * * *

United States v. Anderson, 491 F. Supp. 2d at 2-3.   At the

hearing the Government put into evidence a 270-page summary of

the computation of corrected taxable income.9

     9
      The record here does not include that 270-page summary.
However, respondent’s opposition to Mr. Anderson’s motion alleged
its existence, and in his reply he did not dispute its existence.
                                - 17 -

     It appears that, at the sentencing hearing, Mr. Anderson

argued that the length of his sentence should take into account

the poor conditions of the D.C. jail in which he had been

confined.     On the subject of his having been moved to the

D.C. jail, the judge observed:

          The truth is that Judge Kay and I evaluated the
     evidence that was presented to us and we made judgments
     that led to that, to his being there, and I think that
     it was the right judgment at the time, even though I
     don’t like sending anybody to the DC jail. His own
     conduct led to part of his trauma there and part of his
     being in isolation, but not all of it. So I factor
     that into my sentence * * *.

Sentence was orally announced on March 27, 2007, and a written

judgment reflecting the oral announcement was filed June 15,

2007.     Mr. Anderson was sentenced to nine years’ imprisonment for

criminal tax evasion with respect to tax years 1998 and 1999.

The District Court also imposed a concurrent sentence of four

years’ imprisonment on the fraud count.

The parties’ appeals

     Both parties appealed aspects of the sentence, but Mr.

Anderson did not appeal the conviction itself.10    Mr. Anderson

     10
      Mr. Anderson appealed on two grounds: (1) That the
District Court violated the Ex Post Facto Clause of Article I,
Section 9 of the United States Constitution by using the 2001
Guidelines, which were not in effect at the time that he pleaded
guilty, and (2) that the sentence of 108 months’ imprisonment is
unreasonable. The Government cross-appealed the District Court’s
denial of restitution. In United States v. Anderson, 545 F.3d
1072 (D.C. Cir. 2008), the Court of Appeals for the D.C. Circuit
rejected Mr. Anderson’s arguments and affirmed his sentence of
                                                   (continued...)
                               - 18 -

has taken no action to withdraw his guilty plea or to challenge

the conviction based on the plea.   Instead, Mr. Anderson has

stated only that he intends, at some point in the future, to

challenge his sentence by filing a so-called 2255 motion (i.e., a

motion that is made pursuant to 28 U.S.C. sec. 2255 (2006) to

vacate, set aside, or correct a sentence).

The IRS’s notice of deficiency

      On July 17, 2007, the IRS issued a notice of deficiency to

Mr. Anderson for the years 1995 through 1999, more than six and a

half years after he had filed the latest of his returns for those

years.    The adjustments in the notice of deficiency were derived

from the amounts given in the superseding indictment in the

criminal case.11   The computations in the notice of deficiency

also reflect additional adjustments for itemized or standard

deductions and for personal exemptions for each year.

     10
      (...continued)
imprisonment but reversed the District Court’s denial of
restitution. The Court of Appeals remanded the case to the
District Court to determine the amount of restitution that was
agreed to under the plea agreement.
     11
      In his memorandum in support of his motion for summary
judgment Mr. Anderson states that the notice of deficiency
contained calculations which were “copied exactly” from the
filings that were made by the prosecution in relation to his
criminal case. The record here includes the text of the
superseding indictment for two of the years--1998 and 1999--and
the amounts for those years in the indictment and in the notice
of deficiency do correspond.
                                - 19 -

     At the time the IRS issued the notice of deficiency, the

agency had access to the superseding indictment, the admission in

Mr. Anderson’s plea agreement that the tax loss in the criminal

matter exceeded $100 million, and the 270-page summary of the

computation of corrected taxable income that had been introduced

in evidence at the sentencing hearing in Mr. Anderson’s criminal

case.     However, the IRS did not have access to the supporting

evidence that was presented to the grand jury, because such

evidence is part of the record of the criminal case that is

sealed pursuant to rule 6 of the Federal Rules of Criminal

Procedure.

The parties’ pleadings in this case

     Mr. Anderson filed his petition in this case on September 7,

2007, at which time he resided in New Jersey.     The petition

alleges:

    Due to the conditions in which he was held and threats
    to his witnesses,[12] petitioner was compelled to accept
    a plea agreement. * * * Petitioner and his legal
    counsel, on the record a[t] the plea hearing, made

     12
      As to the petition’s allegations of threats to witnesses,
compare Mr. Anderson’s colloquy with the judge at the plea
hearing (quoted above):

          THE COURT:     I need to ask you, has anyone
     threatened you or anyone close to you, or forced you in
     any way to decide to enter this plea of guilty?

          (Ms. Peterson [defense counsel] conferred with the
     defendant)

             THE DEFENDANT: No, no one has.
                              - 20 -

     clear that petitioner did not agree with most of the
     claims and allegations made against him. He absolutely
     did not agree that he ever received any income or had
     any onwership [sic] interest [13] in Gold & Appel
     Transfer S.A. [Emphasis added.]

The petition denies that any fraud was committed, and it thereby

implicitly asserts both that Mr. Anderson does not owe fraud

penalties and that the assessment of any tax deficiency is barred

by the statute of limitations.14

     Respondent prepared the answer (filed November 7, 2007) on

the basis of facts the IRS had developed prior to the criminal

referral and documents available in the public record of the

criminal case, including the superseding indictment, the summary

computation of corrected taxable income, motion papers, and

transcripts of various hearings.

     In his reply filed November 27, 2007, Mr. Anderson stated

that he is innocent of tax fraud with respect to tax years 1998

and 1999 because he is innocent of tax fraud with respect to the

     13
      This allegation of the petition seems to be at odds with
the comments actually made by Mr. Anderson’s counsel at the plea
hearing (quoted above), and explicitly agreed to by him, that
“Mr. Anderson does not concede that every fact contained within
the indictment is accurate * * *. However, he admits that over
the years he retained control over the assets”. (Emphasis
added.)
     14
      Under the normal three-year statute of limitations of
section 6501(a), the July 2007 notice of deficiency would have
been too late with respect to the 1995-1999 returns, the latest
of which was filed in October 2000. However, section 6501(c)(1)
provides, “In the case of a false or fraudulent return with the
intent to evade tax, the tax may be assessed * * * at any time.”
                             - 21 -

three prior tax years 1995 through 1997 (for which years the

charges against him had been dismissed), and the facts and issues

relating to tax fraud in 1998 and 1999 are “exactly the same” as

in 1995 through 1997:

     [Petitioner d]enies that the[re] was any fraud by
     petitioner in 1998 and 1999 and denies that the
     doctrine of collateral estoppel (estoppel by judgement)
     applies in this matter.

        *       *       *       *       *       *       *

     The issues relating to tax fraud in 1998 and 1999 are
     exactly the same as the issues in 1995, 1996 and 1997.
     The exact same fact [sic] and circumstances are
     inextricably linked for all the years 1995 to 1999. It
     would be an injustice to not resolve the entire issue
     of fraud due to a technicality.

        *       *       *       *       *       *       *

     Petitioner however knows for certain without
     reservation that he did not commit a tax fraud. He had
     neither the motive, intent or history or dishonest acts
     needed to commit such a fruad [sic]. Petitioner ask[s]
     the court to review the entire 1995 to 1999 time period
     in relation to the issues raised in this matter.

The Government’s Rule 6(e) motion

     After respondent filed the answer here, Jeffrey A. Taylor,

the United States Attorney for the District of Columbia, filed

with the D.C. District Court, at the request of the IRS, a motion

for an order under rule 6(e) of the Federal Rules of Criminal

Procedure authorizing disclosure of the grand jury evidence from

Mr. Anderson’s criminal case to the IRS (the Rule 6(e) motion).

In his memorandum in support of the motion Mr. Taylor stated:
                             - 22 -

     [U]nless the grand jury materials are disclosed to the
     Internal Revenue Service, the result may clearly be an
     injustice. Walter Anderson may not pay the full tax
     due because the Internal Revenue Service cannot fully
     and adequately defend against the assertions he has
     made in the United States Tax Court without the grand
     jury materials.

In support of the Rule 6(e) motion, Mr. Taylor submitted an

affidavit of respondent’s counsel (the Rule 6(e) affidavit)

explaining as follows15 the need for the evidence developed

through the grand jury investigation:

     [The] materials from the grand jury investigation of
     Walter Anderson contain the evidence needed to explain
     and support the Internal Revenue Service determinations
     of additional tax, as well as to prove the fraud
     necessary to sustain the civil fraud penalties and to
     hold open the statute of limitations on assessment of
     the tax for 1995 through 1997.

          *     *       *       *       *       *       *

     In the absence of the disclosure requested in this
     motion, it is likely that injustice will occur in the
     course of the resolution of the issues in the Tax Court
     cases. The ability of the Internal Revenue Service to
     obtain documents and testimony from third party
     witnesses through pre-trial discovery is limited under
     Tax Court Rules, making it difficult to replicate the
     work of the grand jury prior to a trial of the Tax
     Court case. If the Internal Revenue Service is unable
     to develop the evidence needed to prove Mr. Anderson’s
     fraud to the Tax Court for 1995 through 1997 (the years
     not included in the guilty plea and criminal judgment)
     it will not only be unable to carry its burden of proof
     on the fraud penalties, but it may be unable to
     overcome the defense of the statute of limitations.
     [Emphasis added.]

     15
      As is explained below, the sentences emphasized here are
the basis for Mr. Anderson’s motion for summary judgment.
                                - 23 -

The District Court granted the Rule 6(e) motion on April 16,

2008.     However, the District Court conditioned its allowance of

the disclosure on the IRS’s providing an electronic copy of the

grand jury evidence to Mr. Anderson.       Since Mr. Anderson has no

access to a computer at the Federal correctional institution

where he is serving his sentence, and the IRS has yet to find an

alternative means of sharing the information with him, the IRS

still has no access to the grand jury evidence.

                              Discussion

I.      Allegations of the Parties

        Mr. Anderson moves for summary judgment on the grounds that

the IRS’s statements in support of the Rule 6(e) motion--

representing that the grand jury evidence is “needed” for the IRS

to prove its case, and that without such evidence respondent may

be unable to carry the burden of proof or overcome the defense of

the statute of limitations--constitute an admission that the IRS

lacked sufficient evidence on which to base its notice of

deficiency and to defend this case in the Tax Court.

        Respondent cross-moves for partial summary judgment on the

grounds that Mr. Anderson is collaterally estopped from

contesting that he fraudulently underpaid his Federal income

taxes in 1998 and 1999, because his guilty plea for criminal tax

evasion under section 7201 as to 1998 and 1999 is “conclusive and

binding” as to those tax years.      Respondent further contends that
                                - 24 -

collateral estoppel also applies to tax years 1995 through 1997,

because, in his reply, Mr. Anderson stated that the issues

relating to tax fraud in 1998 and 1999 are “exactly the same” as

the issues in 1995 through 1997.       In essence, respondent argues

that if Mr. Anderson concedes that the issues are “exactly the

same” for all five tax years at issue, and Mr. Anderson is guilty

of tax fraud for two of the five tax years, then he must be

guilty of tax fraud for all five of the tax years at issue.

II.    Standard for Summary Judgment

       Summary judgment is intended to expedite litigation and

avoid unnecessary and expensive trials.       Fla. Peach Corp. v.

Commissioner, 90 T.C. 678, 681 (1988).       The Court may grant full

or partial summary judgment where there is no genuine issue of

any material fact and a decision may be rendered as a matter of

law.    Rule 121(b);   Celotex Corp. v. Catrett, 477 U.S. 317, 323

(1986); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520

(1992), affd. 17 F.3d 965 (7th Cir. 1994).      The moving party

bears the burden of proving that no genuine issue of material

fact exists, and the Court will view any factual material and

inferences in the light most favorable to the nonmoving party.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986);

Sundstrand Corp. v. Commissioner, supra at 520; Dahlstrom v.

Commissioner, 85 T.C. 812, 821 (1985).       If there exists any

reasonable doubt as to the facts at issue, the motion must be
                              - 25 -

denied.   Sundstrand Corp. v. Commissioner, supra at 520 (citing

Espinoza v. Commissioner, 78 T.C. 412, 416 (1982) (“The opposing

party is to be afforded the benefit of all reasonable doubt, and

any inference to be drawn from the underlying facts contained in

the record must be viewed in a light most favorable to the party

opposing the motion for summary judgment”)).

     The issue of whether Mr. Anderson fraudulently underpaid his

Federal income taxes in 1998 and 1999 can be resolved on the

basis of the undisputed facts.   However, the issue of whether Mr.

Anderson fraudulently underpaid his Federal income taxes in the

three previous tax years, and the issue of the amounts of the

deficiencies (and the fraud penalty thereon) Mr. Anderson owes

for all five of the tax years at issue, remain for trial.

III. Mr. Anderson’s Motion for Summary Judgment

     In his motion for summary judgment, Mr. Anderson asks this

Court to grant him summary judgment on all disputed issues

because (i) “no valid ‘Determination’ was made” with respect to

him under section 6212, and thus, the notice of deficiency sent

to him was invalid; and (ii) the claims in the notice of

deficiency and in respondent’s pleadings “can not be adequately

supported” by the available evidence.   This is the case, he

argues, because the IRS admitted that it lacks sufficient

evidence on which to base the notice of deficiency and to defend

this case.   It made these admissions (he contends) in the
                              - 26 -

Rule 6(e) motion and the Rule 6(e) affidavit, which both request

the District Court to release the grand jury evidence from

Mr. Anderson’s criminal case on the grounds that such evidence is

likely to be “needed” for respondent to meet the burden of proof

in this case.   From this purported admission, Mr. Anderson argues

that he has rebutted the presumption of correctness that is

normally accorded to a notice of deficiency and has shifted the

burden of proof to respondent--a burden that he argues respondent

admits he cannot meet because of the current lack of access to

the grand jury evidence.

     Thus, Mr. Anderson appears to make two distinct arguments.

First, he appears to challenge whether the notice of deficiency

reflects a valid determination under section 6212.   Second, he

argues, in effect, that he has supported, with evidence

sufficient under Rule 121, his position that he committed no

fraud, and because respondent lacks the “needed” evidence from

the grand jury record in his criminal case, respondent cannot

raise any genuine issue of material fact, and we must grant

judgment in Mr. Anderson’s favor as a matter of law.

     A.   The notice of deficiency reflects a valid determination.

     Mr. Anderson argues that the IRS made no valid determination

under section 6212 because the IRS lacked sufficient evidence on
                              - 27 -

which to base its notice of deficiency.16    Section 6212(a)

requires the IRS to determine that a deficiency exists before

issuing a notice of deficiency.   If a purported notice of

deficiency reveals on its face that no determination of a tax

deficiency has been made with respect to the taxpayer who is

named in the notice, it does not meet the requirements of section

6212(a), and this Court has no jurisdiction to hear a case

arising therefrom.   Scar v. Commissioner, 814 F.2d 1363, 1370

(9th Cir. 1987), revg. 81 T.C. 855 (1983).

     However, under Campbell v. Commissioner, 90 T.C. 110, 113

(1988), if “the notice of deficiency does not reveal on its face

that the Commissioner failed to make a determination, a

presumption arises that there was a deficiency determination.”

This presumption is made “conclusive” upon the presentation of

further evidence that ties the calculations in the notice of

deficiency to the taxpayer who is named in the notice.    See id.

For example, in Campbell we held that the existence of other

supporting schedules in the IRS’s case file that clearly tied the

     16
      If Mr. Anderson were to prevail in demonstrating that
there was no valid “determination” by the IRS, then the
consequence would be that this Court would lack jurisdiction and
would have to dismiss his petition. In his response to
respondent’s memorandum in opposition to his motion for summary
judgment, Mr. Anderson has clarified that he did not intend to
argue that this Court lacks jurisdiction. Rather, Mr. Anderson
is “completely convinced” that this Court has jurisdiction. As
is explained below, we agree. However, because he seems to
persist with some aspects of the argument, we address it here
despite his ostensible concession.
                             - 28 -

notice of deficiency to items reported on the correct taxpayer’s

tax return made the presumption of a valid determination

conclusive. Id.

     The purpose of a notice of deficiency is to inform a

taxpayer that a deficiency has been determined, specify the year

for which the deficiency is determined, and state the amount of

the deficiency in unequivocal terms, all in a communication sent

to the right taxpayer at his last known address.17   In rare

cases, such as Scar v. Commissioner, supra, where the calculation

of the deficiency in the notice of deficiency has no connection

whatsoever to the taxpayer who is named in the notice, the notice

is invalid on its face.

     In the instant case, the notice of deficiency is facially

valid and the presumption of correctness applies, because the

notice states a deficiency and the tax years for which the

deficiency is determined, correctly refers to Mr. Anderson, and

was sent to his last known address.   In fact, the notice of

deficiency even explains the IRS’s calculation of the deficiency

     17
      See Commissioner v. Stewart, 186 F.2d 239, 242 (6th Cir .
1951); Foster v. Commissioner, 80 T.C. 34, 229-230, affd. in part
and vacated in part on other grounds 756 F.2d 1430 (9th Cir.
1985); see also sec. 7522 (prescribing the content of a notice of
deficiency); Shea v. Commissioner, 112 T.C. 183, 197 (1999)
(“where a notice of deficiency fails to describe the basis on
which the Commissioner relies to support a deficiency
determination * * *, the Commissioner will bear the burden of
proof”).
                              - 29 -

by reference to various sections of the Internal Revenue Code.18

Moreover, this presumption is made “conclusive”, because the

supporting documents attached to the notice of deficiency all

directly relate to Mr. Anderson’s tax returns.

     Furthermore, the facts of the instant case are not analogous

to the extreme facts of Scar v. Commissioner, supra, where a

notice of deficiency was held to be facially invalid because the

IRS made no determination with respect to the taxpayers who were

named in the notice.   In that case, the Commissioner acknowledged

that the deficiency shown on the notice of deficiency was not

based on the taxpayers’ return and that the notice of deficiency

referred to a tax shelter that had no connection with the

taxpayers or their return. Id. at 1368.   In contrast, the notice

of deficiency sent to Mr. Anderson calculates a deficiency based

upon Mr. Anderson’s returns, his bank accounts, and the income of

a company that Mr. Anderson admittedly controlled for purposes of

Federal securities law.   Though Mr. Anderson disputes that he

owned Gold & Appel for Federal tax purposes during the tax years

     18
      Mr. Anderson also objects that the notice of deficiency
“didn’t contain any explanation of the basis upon which the
Internal Revenue Service ‘determined’ that * * * [Mr. Anderson]
had any tax liability for the income of” Gold & Appel. In fact,
the notice of deficiency references various sections of the
Internal Revenue Code to explain the alleged items of income and
penalties. Furthermore, “the Commissioner need not explain how
the deficiencies were determined” for a determination and a
notice of deficiency to be valid. Scar v. Commissioner, 814 F.2d
1363, 1367 (9th Cir. 1987), revg. 81 T.C. 855 (1983).
                               - 30 -

at issue, even he does not allege that he had no connection with

Gold & Appel prior to receiving the notice of deficiency.    Thus,

the notice of deficiency herein is not facially invalid under the

rationale of Scar v. Commissioner, supra.    Rather, the notice of

deficiency is valid, and we have jurisdiction to hear this case

pursuant to 6213(a).

       B.   Respondent raised genuine issues of material fact as to
            Mr. Anderson’s contention that there is no evidence to
            support respondent’s position.

       As noted above in part II, we grant summary judgment only if

the moving party shows that no genuine issue exists as to any

material fact and that the legal issues presented by the motion

should be decided in favor of the moving party as a matter of

law.    In his memorandum in support of his motion for summary

judgment Mr. Anderson alleges that the claims in respondent’s

pleadings are “not supported by any evidence” and, therefore,

summary judgment should be granted in his favor.    To support this

contention, he cites the IRS’s statements in support of its Rule

6(e) motion, in which it represented to the District Court that

the grand jury evidence from his criminal case is likely to be

“needed” in order to prove the IRS’s case in the Tax Court.      Mr.

Anderson argues that these statements constitute respondent’s

admission that there is insufficient evidence to defend this

case.
                                 - 31 -

     It is true that when a party (here, respondent) has the

burden of proof on an issue (here, fraud), the other party (here,

Mr. Anderson) may move for summary judgment on the grounds that

evidence is lacking.     The question whether the movant must

instead somehow prove a negative was answered by the Supreme

Court in Celotex v. Catrett, 477 U.S. 317 (1986).     Mr. Anderson

does not cite Celotex, but it vindicates his apparent intuition

that respondent’s burden of proof on the fraud issue should

affect the summary judgment dynamic:

     [T]he plain language of Rule 56(c) [equivalent to Tax
     Court Rule 121(b)] mandates the entry of summary
     judgment, after adequate time for discovery and upon
     motion, against a party who fails to make a showing
     sufficient to establish the existence of an element
     essential to that party's case, and on which that party
     will bear the burden of proof at trial. In such a
     situation, there can be “no genuine issue as to any
     material fact,” since a complete failure of proof
     concerning an essential element of the nonmoving
     party’s case necessarily renders all other facts
     immaterial. The moving party is “entitled to a
     judgment as a matter of law” because the nonmoving
     party has failed to make a sufficient showing on an
     essential element of her case with respect to which she
     has the burden of proof. * * * [Id. at 322-323.]

     Mr. Anderson does cite Anastasato v. Commissioner, 794 F.2d
884, 887 (3d Cir. 1986) (citation omitted), which holds that--

     a court must not give effect to the presumption of
     correctness [of a deficiency determination] in a case
     involving unreported income if the Commissioner cannot
     present “some predicate evidence connecting the
     taxpayer to the charged activity.” * * *[19]

     19
          Anastasato goes on to say, “Most of the cases stating that
                                                       (continued...)
                              - 32 -

Mr. Anderson cites Anastasato as pertinent to his own situation,

where (he says) respondent admittedly “needs” still-unavailable

grand jury information and therefore lacks evidence to support

the determination of fraud.   Since (Mr. Anderson argues)

respondent has no evidence to connect him with the alleged

unreported income, the IRS’s determination can have no

presumption of correctness under Anastasato.    And, if

Mr. Anderson were right as to the state of the evidence, he could

round out the argument by stating that because respondent has no

evidence to carry the burden of proof on the fraud issue,

Mr. Anderson is entitled to prevail on summary judgment.

     However, Mr. Anderson has in fact failed to show that no

genuine issue exists as to any material fact.   Contrary to Mr.

Anderson’s claims, respondent does have evidence of civil tax

fraud in all five tax years at issue.20   Though Mr. Anderson

correctly notes that the IRS has been unable to access the

“needed” grand jury evidence from his criminal case, the IRS does

     19
      (...continued)
the Commissioner is not entitled to the presumption based on a
naked assessment without factual foundation have involved illegal
income. * * * Given the obvious difficulties in proving the
nonreceipt of income, we believe the Commissioner should have to
provide evidence linking the taxpayer to the tax-generating
activity in cases involving unreported income, whether legal or
illegal.” Id. at 887.
     20
      In fact, as is explained below in part IV.B, Mr. Anderson
is collaterally estopped from contesting that he fraudulently
underpaid his income taxes for tax years 1998 and 1999.
                              - 33 -

have access to his indictments for criminal tax evasion in 1995

through 1999,21 his guilty plea for criminal tax evasion in 1998

and 1999,22 and the statements he and his counsel made on the

record at his plea hearing.

     Furthermore, Mr. Anderson’s reliance on Anastasato is

misplaced.   Though Mr. Anderson correctly states the rule of

Anastasato, he has failed to show that respondent lacks “some

predicate evidence” connecting him with Gold & Appel and its

income.   Instead, Mr. Anderson admits that he controlled Gold &

Appel for purposes of Federal securities law; and like the

taxpayer in Anastaso, Mr. Anderson is connected with the “charged

activity” of fraudulently underpaying his income taxes by

sufficient “predicate evidence”--including his superseding

indictment, his guilty plea, and the statements he and his

counsel made at his plea hearing.   Therefore, the presumption of

     21
      Respondent can rely on the indictment. See Whitfield v.
Commissioner, T.C. Memo. 1972-139, 31 TCM (CCH) 654, 663 (1972)
(“At the trial, respondent urged that petitioner was collaterally
estopped from asserting her cash hoard defense. The * * *
indictment * * * was admissible in connection with that
allegation”). A grand jury’s indictment that led to a conviction
is admissible under the hearsay exception of Fed. R. Evid.
803(22) (“Judgment of previous conviction”). See Mike’s Train
House, Inc. v. Lionel, L.L.C., 472 F.3d 398, 412 (6th Cir. 2006).
     22
       See Mitchell v. Commissioner, T.C. Memo. 1982-162 (listing
a guilty plea for criminal tax evasion in 1968 under sec. 7201,
among other things, as evidence to prove fraud in 1968 through
1971), affd. without published opinion 720 F.2d 679 (6th Cir.
1983).
                             - 34 -

correctness applies to the IRS’s determination in the instant

case.

     Since respondent has presented evidence of civil tax fraud

in the form of Mr. Anderson’s guilty plea for criminal tax

evasion in 1998 and 1999 and his indictments for criminal tax

evasion in 1995 through 1999, we hold that Mr. Anderson has

failed to show that no genuine issue exists as to any material

fact, and his request for summary judgment will be denied.

     Even if respondent’s evidence were insufficient to raise,

for the years 1995 through 1997, a genuine issue of material fact

as to Mr. Anderson’s motion, the motion should still be denied.

Rule 121(e) provides:

     If it appears from the affidavits of a party opposing
     the motion that such party cannot for reasons stated
     present by affidavit facts essential to justify such
     party’s opposition, then the Court may deny the motion
     or may order a continuance to permit affidavits to be
     obtained or other steps to be taken or may make such
     other order as is just. * * * [Emphasis added.]

Respondent’s opposition includes the affidavit submitted in

support of the Government’s Rule 6(e) motion before the District

Court, and the District Court’s order granting that motion.    The

IRS has demonstrated (both to that court and here) that it is

entitled to get the information that the Government developed

during its investigation and prosecution of Mr. Anderson.    The

only reason that it does not yet have that information is that

Mr. Anderson is still incarcerated, and the IRS therefore cannot
                                 - 35 -

fulfill a precondition of receiving the Rule 6(e) information--

i.e., it cannot yet share it with Mr. Anderson.     That is, the IRS

is being deprived of the information because Mr. Anderson is

incarcerated for committing a crime.      This Court could hardly let

Mr. Anderson’s criminally adjudicated guilt become a reason that

he prevails in the civil suit (by blocking the IRS’s receipt of

information).     Rather, even if it were true that, for 1995

through 1997, respondent were unable to submit sufficient

evidence to oppose summary judgment, the Court would deny

Mr. Anderson’s motion and defer any summary adjudication of its

issues until respondent has had a reasonable opportunity to

obtain the Rule 6(e) information and to conduct reasonable

followup discovery.

IV.     Respondent’s Motion for Partial Summary Judgment

        A.   To prevail in this case, respondent must prove fraud.

      The issue raised is whether Mr. Anderson is liable for

penalties for fraud for the tax years at issue under section

6663.    Respondent bears the burden of proving civil tax fraud.

See sec. 7454(a); Rule 142(b).    If respondent fails to prove

fraud, then the statute of limitations may prevent the IRS from

assessing and collecting any of the deficiencies or penalties.

See sec. 6501(a).

      Mr. Anderson filed income tax returns for 1995, 1996, 1997,

1998, and 1999 on April 15, 1996, June 21, 1997, August 31, 1998,
                              - 36 -

September 30, 1999, and October 19, 2000, respectively.     The IRS

issued a notice of deficiency with respect to tax years 1995

through 1999 to Mr. Anderson on July 17, 2007.   Generally, the

IRS must assess a deficiency within three years of the date on

which the tax return that relates to the deficiency was filed.

Sec. 6501(a).   Here, more than three years has elapsed between

the filing date of Mr. Anderson’s tax return for each of the five

tax years at issue and the date of issuance of the notice of

deficiency, which is the first step in the process of assessing a

deficiency.   If the general rule of section 6501(a) applies, then

the IRS has failed to assess the deficiency within the period of

limitations and is barred from assessing and collecting any of

the deficiencies or additions to tax for the five tax years at

issue.   However, if the deficiency is attributable to fraud, then

the IRS may assess the deficiency at any time.   See sec.

6501(c)(1).   Thus, the entirety of the instant case may turn on

whether Mr. Anderson is liable for fraud under section 6663.

Because Mr. Anderson entered a plea of guilty to the charge under

section 7201 of willfully attempting to evade or defeat income

tax in 1998 and 1999, but not in 1995 through 1997, we will

bifurcate our treatment of the fraud issue and first deal with

1998 and 1999 and respondent’s assertion of collateral estoppel

as to those tax years.
                              - 37 -

     B.   Collateral estoppel bars Mr. Anderson’s relitigation of
          his fraud as to the years 1998 and 1999.

          1.   Mr. Anderson’s plea of attempting to evade or
               defeat tax establishes his fraud.

     Respondent asserts that Mr. Anderson’s guilty plea to two

counts of criminal tax evasion under section 7201 with respect to

tax years 1998 and 1999 should collaterally estop him from

contesting that he fraudulently underpaid his income taxes in

those tax years.   In Montana v. United States, 440 U.S. 147,

153-154 (1979), the Supreme Court explained the doctrine of

collateral estoppel as follows:

     Under collateral estoppel, once an issue is actually
     and necessarily determined by a court of competent
     jurisdiction, that determination is conclusive in
     subsequent suits based on a different cause of action
     involving a party to the prior litigation.

     The three Internal Revenue Code sections involved in this

collateral estoppel question are section 7201 (defining the crime

of “attempt[ing] * * * to evade or defeat any tax”),

section 6501(c)(1)23 (permitting an assessment of tax at any time

“[i]n the case of a false or fraudulent return with the intent to

     23
      Respondent’s answer also asserts that section 6501(c)(8)
(tolling the statute of limitation for assessment of tax until
the date which is three years after the filing date of the
information return that relates to such tax) applies with respect
to Mr. Anderson’s alleged subpart F income from Gold & Appel,
because of his alleged failure to file a Form 5471, Information
Return of U.S. Persons With Respect To Certain Foreign
Corporations, for Gold & Appel and Iceberg Transport for each of
the five tax years at issue. However, because neither party
addresses section 6501(c)(8) in connection with the pending
cross-motions, we do not address this issue here.
                               - 38 -

evade tax”), and section 6663(a) (imposing a civil penalty for

underpayments “due to fraud”).   Mr. Anderson was previously

convicted of “attempt[ing] * * * to evade or defeat” his income

tax liability for 1998 and 1999 (under section 7201), whereas the

issues now before us are whether he filed “false or fraudulent

return[s] with the intent to evade tax” (under

section 6501(c)(1)), and whether he had tax underpayments “due to

fraud” (under section 6663).   Though the “evade or defeat”

wording of the criminal statute does not include the “fraud”

vocabulary of the two civil statutes, an evasion conviction

established fraud.   We have repeatedly held that “[a] taxpayer is

collaterally estopped from denying civil tax fraud under section

[6663] * * * when convicted for criminal tax evasion under

section 7201 for the same taxable year.”   DiLeo v. Commissioner,

96 T.C. 858, 885 (1991), affd. 959 F.2d 16 (2d Cir. 1992).24

     24
      See also Amos v. Commissioner, 43 T.C. 50, 55 (1964) (“one
who ‘willfully attempts * * * to evade * * * tax’ within the
meaning of the criminal sanction does so with the requisite
fraudulent intent for the purpose of the civil sanction”), affd.
360 F.2d 358 (4th Cir. 1965); Arctic Ice Cream Co. v.
Commissioner, 43 T.C. 68, 74-75 (1964) (“This conviction [for
criminal tax fraud] necessarily carries with it the ultimate
factual determination that the resulting deficiency * * * was
[attributable to civil tax fraud]”); Montalbano v. Commissioner,
T.C. Memo. 2007-349, 94 TCM (CCH) 499, 500 (“It is well estab-
lished that a final criminal judgment for tax evasion under
section 7201 collaterally estops relitigation of the issue of
fraudulent intent in a subsequent proceeding over the civil fraud
penalty”), affd. without published opinion 103 AFTR 2d 379,
2009-1 USTC par. 50,153 (11th Cir. 2009); Uscinski v. Commis-
sioner, T.C. Memo. 2006-200, 92 TCM (CCH) 285, 287 (“Because the
                                                   (continued...)
                             - 39 -

          2.   Mr. Anderson’s arguments against collateral
               estoppel lack merit.

     Mr. Anderson contends that we should disregard his criminal

conviction and that collateral estoppel therefrom should not

constrain him in the current civil litigation, because (he says)

(i) he pleaded guilty under duress to escape the poor conditions

of the D.C. jail, (ii) he did not allocute to any specific facts

in his guilty plea to which collateral estoppel could apply,

(iii) the evidence before this Court is materially different from

the evidence in his criminal case, (iv) his criminal case is

unresolved because he intends to file a “2255 motion” at some

time in the future, and (v) some caselaw exists to support his

contention that a taxpayer is not necessarily collaterally

estopped from denying civil tax fraud under section 6663 in a Tax

     24
      (...continued)
elements of criminal tax evasion and civil tax fraud are
identical, petitioner’s prior conviction under section 7201
conclusively establishes the elements necessary for finding fraud
under section 6663”); Wilson v. Commissioner, T.C. Memo.
2002-234, 84 TCM (CCH) 321, 324 (“We hold that the doctrine of
collateral estoppel bars * * * [the taxpayer convicted under
section 7201] from relitigating in the instant case the matters
litigated in * * * [the taxpayer’s] criminal tax proceeding,
i.e., whether * * * [the taxpayer] underpaid his tax for each of
the taxable years * * * and whether his underpayment of such tax
for each such year was due to fraud”). Because a conviction for
criminal tax evasion under section 7201 conclusively establishes
civil tax fraud under section 6663 in the same tax year, the
unlimited statute of limitations of section 6501(c)(1) is also
applicable. See DiLeo v. Commissioner, supra at 885; Amos v.
Commissioner, supra at 55.
                                - 40 -

Court proceeding when convicted for criminal tax evasion under

section 7201 for the same taxable year.

                  a.   Duress

     Mr. Anderson alleges that he pleaded guilty only because of

the conditions under which he was confined in the D.C. jail

pending trial.    For that reason he contends that we should

disregard his guilty plea to the counts under section 7201.       This

argument cannot avail.

     It is true that a conviction can be set aside upon a showing

that the defendant’s plea was coerced or otherwise improper, but

that relief generally must be requested either in a direct appeal

from the court that entered the conviction or in a habeas

proceeding.25    The facts about the D.C. jail that Mr. Anderson

alleges in order to undermine the voluntary character of his plea

were explicitly on the record at his plea hearing in the D.C.

District Court.    Those allegations were heard by the District

      25
      See Fed. R. Crim. P. 11(e) (“After the court imposes
sentence, the defendant may not withdraw a plea of guilty or nolo
contendere, and the plea may be set aside only on direct appeal
or collateral attack”); Connors v. Graves, 538 F.3d 373, 378 (5th
Cir. 2008) (plaintiff sued police officers for use of excessive
force after pleading guilty to discharging a weapon in the
altercation with such officers; the court held that the lawsuit
amounted to a contention that the plaintiff “admitted to
something other than the crime for which he was convicted”, which
“constitutes a claim that his guilty plea was not knowing and
voluntary--an issue properly raised only in either a direct
appeal or a habeas proceeding”).
                               - 41 -

Court judge who carefully examined Mr. Anderson to assure that

the plea was knowing and voluntary and then accepted his plea.

     However, we need not attempt to anticipate what the District

Court might do if it were asked to set aside the plea, because

Mr. Anderson has taken no action in the D.C. District Court to

withdraw his guilty plea or to challenge the conviction based on

the plea (perhaps because he sees that such a request would be

futile).26   Mr. Anderson’s attempted collateral attack in the Tax

Court on the validity of his previous conviction in the District

Court is improper.   An issue resolved in favor of the United

States in a criminal prosecution may not be contested by the same

defendant in a civil suit.   Tomlinson v. Lefkowitz, 334 F.2d 262,

264 (5th Cir. 1964) (citing Local 167, Intl. Bhd. of Teamsters v.

United States, 291 U.S. 293 (1934), and Emich Motors Corp. v.

Gen. Motors Corp., 340 U.S. 558, 568-569 (1951)); Ochs v.

Commissioner, T.C. Memo. 1986-595, 52 TCM (CCH) 1218, 1220 (“A

civil proceeding is an inappropriate vehicle for a collateral

attack on a previous criminal proceeding”).   Thus, Mr. Anderson’s

conviction for violating section 7201 is a final judgment from

which collateral estoppel lies.

      26
      Mr. Anderson has professed an intention to challenge his
sentence by filing a 2255 motion, discussed infra in
part IV.B.2.d.
                              - 42 -

               b.    Allocution to Specific Facts

     Mr. Anderson alleges that he did not allocute or admit to

any specific facts in his guilty plea to which collateral

estoppel could apply.   He bases this argument, in large part, on

a statement that he made at his plea hearing:

     THE DEFENDANT: Yes. However, we don’t agree with all
     of the allegations of the government, but I am agreeing
     to plead guilty to those charges. [Emphasis added.]

If a defendant pleads guilty but denies particular allegations in

the indictment, then it is possible that collateral estoppel will

not bind the defendant to those denied allegations,27 but Mr.

Anderson failed to specifically deny any particular fact,

allegation, or issue in the indictment or plea agreement at his

plea hearing or otherwise--he merely stated that he did not agree

with “all of the allegations of the government”.

     Furthermore, Mr. Anderson did allocute to specific facts at

his plea hearing.   His defense counsel stated--and Mr. Anderson

agreed--that “over the years” he retained control over the assets

of Gold & Appel and was required to pay taxes on the gains from

     27
      See United States v. Tolson, 988 F.2d 1494, 1501 n.6 (7th
Cir. 1993) (“absent evidence that the defendant reserved the
issue in the plea, he may not challenge the facts in the
indictment and plea agreement”) (quoting United States v.
Gilliam, 987 F.2d 1009, 1014 (4th Cir. 1993) (“‘a plea of guilty
to an indictment containing an allegation of the amount of drugs
for which a defendant is responsible may, in the absence of a
reservation by the defendant of his right to dispute the amount
at sentencing, constitute an admission of that quantity for
sentencing purposes’”)).
                               - 43 -

those assets by Federal law.   Mr. Anderson also agreed that for

purposes of computing his sentence, the Government could prove

that the total tax loss was in excess of $100 million.28   Finally,

when the District Court judge asked Mr. Anderson whether he was

“pleading guilty to [tax evasion] voluntarily and because [he is]

guilty”, Mr. Anderson responded “Yes.”

     Morever, a “plea of guilty * * * is a conclusive judicial

admission of all of the essential elements of the offense which

the indictment charges.”    Arctic Ice Cream Co. v. Commissioner,

43 T.C. 68, 75 (1964).   Therefore, in addition to his

allocutions, Mr. Anderson admitted and is estopped from

contesting the existence of the essential elements of criminal

tax evasion with respect to tax years 1998 and 1999, which are

“identical” to the elements of civil tax fraud.   See Uscinski v.

Commissioner, T.C. Memo. 2006-200.

               c.     Change in Evidence

     Mr. Anderson alleges that “three significant and material

evidentiary changes have occurred [since his criminal case] which

completely change the complexion of the issues that the Tax Court

will now consider.”   For that reason he contends that the facts

     28
      The Court of Appeals for the Third Circuit (to which an
appeal in this case would lie) has held that “facts relevant to
sentencing contained in the indictment and plea agreement are
conclusively established by the entry of a guilty plea even if
they are not elements of the offense charged.” United States v.
Dickler, 64 F.3d 818, 823 n.7 (3d Cir. 1995) (citing United
States v. Parker, 874 F.2d 174, 178 (3d Cir. 1989)).
                              - 44 -

before this Court are “so dissimilar” from the facts before the

District Court in his criminal case that collateral estoppel

should not apply.   This argument cannot avail.

     The three items that Mr. Anderson cites are (i) a report

prepared at his request by Eisner LLP, an accounting and advisory

firm, which analyzes Mr. Anderson’s relationship to Gold & Appel

and concludes, among other things, that he intended to legally

avoid (rather than to criminally evade) Federal income taxes on

the company’s income; (ii) a Washington Post article29 that

asserts the Government “has doubts about whether Anderson has any

sizable assets hidden abroad” on the basis of two anonymous “law

enforcement sources familiar with the case”, which Mr. Anderson

construes to be an admission on the part of the Government that

he is not hiding assets overseas; and (iii) respondent’s

admission, in the answer, that Mr. Anderson formed the Smaller

World Trust in 1993.

     As we noted (supra note 5), the Court permitted respondent

to amend the answer and withdraw the admission that Mr. Anderson

formed the Smaller World Trust in 1993, and therefore

Mr. Anderson cannot rely on that admission.   Neither the report

by Eisner LLP nor the Washington Post article affects the

application of collateral estoppel in this case.   Quite apart

     29
      Leonnig, “Prosecutors’ Slip Keeps Money in Limbo”, Wash.
Post, Mar. 29, 2007, at B6.
                              - 45 -

from any hearsay or other evidentiary issues that would preclude

reliance on those materials, the fact that Mr. Anderson has

pleaded guilty to criminal tax evasion with respect to tax years

1998 and 1999 remains.   A “plea of guilty * * * is a conclusive

judicial admission of all of the essential elements of the

offense which the indictment charges.”   Arctic Ice Cream Co. v.

Commissioner, supra at 75.   Therefore, even if we were to find

the report by Eisner LLP or the Washington Post article to be

persuasive, Mr. Anderson has admitted and is estopped from

contesting the existence of the essential elements of criminal

tax evasion with respect to tax years 1998 and 1999.

                d.   Mr. Anderson’s Anticipated 2255 Motion

     Mr. Anderson alleges that his criminal case is unresolved

because he intends to file a “2255 motion” under 28 U.S.C.

section 2255.   For that reason, he contends that “[t]he matters

related to his plea agreement which relates to tax years 1998 and

1999 are still open, have not been finally determined and thus

collateral estoppel should not apply in this instance.”   This

argument cannot avail.

     No court has granted Mr. Anderson any relief under 28 U.S.C.

section 2255, nor has he even filed any motion requesting such

relief, so it would be speculative for this Court to imagine how

the granting of such a motion might impact the finality of

Mr. Anderson’s criminal conviction for purposes of collateral
                              - 46 -

estoppel in this or other civil cases.   “It is the general rule

that issue preclusion attaches only ‘when an issue of fact or law

is * * * determined by a valid and final judgment’”, Arizona v.

California, 530 U.S. 392, 414 (2000) (quoting 1 Restatement,

Judgments 2d, sec. 27 (1982)); and Mr. Anderson’s conviction is

valid and final.   Mr. Anderson has cited no authority, and the

Court is aware of none, to suggest that a criminal conviction

lacks finality for purposes of collateral estoppel unless and

until all potential 2255 motions are resolved.30   Thus, the

possibility that Mr. Anderson may file a 2255 motion does not

affect the application of collateral estoppel in this case.

     30
      Rather, public policy and judicial economy would seem to
weigh in favor of respecting the finality of criminal convictions
in civil matters regardless of the possible pendency of a “2255
motion”. Cf. Estate of Lunt v. Gaylor, No. 04-CV-398-PB (D.N.H.,
Aug. 4, 2005) (“several other courts have determined that it
would be injurious to allow defendants to use habeas corpus as a
tool to bar collateral estoppel”); Mueller v. J.C. Penney Co.,
219 Cal. Rptr. 272, 277 (Ct. App. 1985) (“For purposes of
collateral estoppel, a judgment free from direct attack is a
final judgment”); 1 Restatement, Judgments 2d, sec. 13, cmt. g
(1982) (“To hold invariably that * * * [collateral estoppel] is
not to be permitted until a final judgment in the strict sense
has been reached in the first action can involve hardship --
either needless duplication of effort and expense in the second
action to decide the same issue, or, alternatively, postponement
of decision of the issue in the second action for a possibly
lengthy period of time until the first action has gone to a
complete finish. In particular circumstances the wisest course
is to regard the prior decision of the issue as final for the
purpose of issue preclusion without awaiting the end judgment”).
                                - 47 -

                  e.   Application of Collateral Estoppel to
                       Criminal Convictions in the Tax Court

     Mr. Anderson argues--citing three opinions from this Court--

that a taxpayer is not necessarily collaterally estopped from

denying civil tax fraud under section 6663 in a Tax Court

proceeding when convicted for a tax crime for the same taxable

year.    However, Mr. Anderson’s reliance on Jondahl v.

Commissioner, T.C. Memo. 2005-55, Bierschbach v. Commissioner,

T.C. Memo. 1988-199, and Nigra v. Commissioner, T.C. Memo.

1968-273, is misplaced.

        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.     Wright v.

Commissioner, 84 T.C. 636, 643 (1985).     Mr. Anderson’s

conviction, on the other hand, was for “attempt[ing] * * * to

evade or defeat any tax” under section 7201, a conviction that

does prove fraud under section 6663.     See supra part IV.B.1.

        Nigra, on the other hand, involved a plea of nolo

contendere--not a guilty plea.    “A plea of nolo contendere by a

taxpayer to a charge of criminal tax fraud and resulting

conviction do not bar him from disputing the imposition of civil

fraud penalties for the same taxable years”, because “[t]he

doctrine of collateral estoppel raised by a plea of guilty to

criminal tax fraud is not applicable to a plea of nolo

contendere.”     Vazquez v. Commissioner, T.C. Memo. 1993-368,
                              - 48 -

66 TCM (CCH) 406, 415 n.12 (citing Doherty v. Am. Motors Corp.,

728 F.2d 334, 337 (6th Cir. 1984), Hicks Co. v. Commissioner, 56
T.C. 982, 1027 (1971), affd. 470 F.2d 87 (1st Cir. 1972), and

Godfrey v. Commissioner, T.C. Memo. 1968-199)).   Mr. Anderson,

however, entered a plea of guilt, not a plea of nolo contendere;

and a guilty plea resulting in a conviction for criminal tax

evasion under section 7201 conclusively establishes fraud in a

subsequent civil tax fraud proceeding through the application of

the doctrine of collateral estoppel.   DiLeo v. Commissioner, 96
T.C. 885; Marretta v. Commissioner, T.C. Memo. 2004-128, affd.

168 Fed. Appx. 528 (3d Cir. 2006).

     C.   Partial summary judgment is appropriate here.

     Respondent has moved only for partial summary judgment.

Respondent requests a holding that Mr. Anderson committed fraud

but defers the question of the amounts of his liabilities.

Mr. Anderson argues that it serves no purpose for this Court to

rule on whether an underpayment in any of the tax years at issue

is due to fraud before it has determined the amount, if any, of

the underpayment.   He observes that if the amount of the

underpayment for a given year is later found to be zero, then

there would be no fraud penalty.   However, this scenario is not

possible here.   “‘[T]he doctrine of collateral estoppel bars * *

* [the taxpayer convicted under section 7201] from relitigating

in the instant case the matters litigated in * * * [the
                               - 49 -

taxpayer’s] criminal tax proceeding, i.e., whether * * * [the

taxpayer] underpaid his tax for each of the taxable years * * *

and whether his underpayment of such tax for each such year was

due to fraud.’”    Christians v. Commissioner, T.C. Memo. 2008-220

(quoting, with alterations, Wilson v. Commissioner, T.C. Memo.

2002-234).   Thus, Mr. Anderson is collaterally estopped from

litigating whether there is an underpayment (however small) in

either year and whether any such underpayment is due to fraud.

Furthermore, in his allocution at his plea hearing, Mr. Anderson

specifically conceded, for purposes of computing his sentence,

that the Government could prove that the total tax loss for tax

years 1998 and 1999 was in excess of $100 million.   See supra

p. 14.   He cannot now deny that fact.

     Therefore, we hold that respondent has shown that he is

entitled to summary judgment with respect to the issue of whether

collateral estoppel applies to establish civil tax fraud in 1998

and 1999.    We hold that the statute of limitations does not bar

assessment of Mr. Anderson’s tax liability for those years and

that he will be liable for the fraud penalty.   However, the issue

of the amounts of the deficiencies of tax and penalties in 1998

and 1999 remains for trial.
                               - 50 -

     D.    On the record before us, collateral estoppel does not
           bar Mr. Anderson’s litigation of fraud as to the years
           1995 through 1997.

     Respondent asserts that Mr. Anderson’s guilty plea to two

counts of criminal tax evasion under section 7201 with respect to

tax years 1998 and 1999 should collaterally estop him from

contesting that he fraudulently underpaid his income taxes in

1995 through 1997.   However, Mr. Anderson did not enter a guilty

plea for tax years 1995 through 1997; rather, those charges were

dismissed.

     As noted above, the burden of proving fraud under section

6663 is on respondent.   See sec. 7454(a); Rule 142(b).

Furthermore, a guilty plea to criminal tax evasion under section

7201 in one tax year conclusively establishes fraud in that year,

but not in other tax years.    “[P]roof of fraud for one year will

not sustain the respondent’s burden of proving fraud in another

year.”    Estate of Hanna v. Commissioner, T.C. Memo. 1976-32,

35 TCM (CCH) 128, 135 (citing McLaughlin v. Commissioner, 29
B.T.A. 247, 249 (1933)).   Thus, the mere fact that Mr. Anderson

had pleaded guilty to tax evasion in 1998 and 1999 could not, by

itself, be determinative of whether he had fraudulently underpaid

his income taxes in the prior years 1995 through 1997.

     However, to the mere fact of Mr. Anderson’s 1998 and 1999

guilty plea respondent adds the observation that, in his reply,

Mr. Anderson has admitted that the facts and issues relating to
                                - 51 -

tax fraud in 1998 and 1999--tax years in which we have held that

he is collaterally estopped from denying that he committed civil

tax fraud--are “exactly the same” as the issues in 1995 through

1997.31    Respondent argues that since Mr. Anderson is guilty of

tax fraud in 1998 and 1999, and since Mr. Anderson stated that

the facts and issues are “exactly the same” in all five tax years

at issue (1995 through 1999), he must be liable for civil tax

fraud in all five tax years.

     Respondent makes this argument under the rubric of

collateral estoppel, but the argument in fact rests on two

conjoined principles--i.e., collateral estoppel and judicial

admission.    Respondent argues that Mr. Anderson is barred by

collateral estoppel from denying fraud in 1998 and 1999; that he

is bound (in effect, by judicial admission) to his assertion that

the facts and issues are the same in all five years; and that his

guilt as to the later years should therefore be extrapolated to

the earlier years.

     However, this argument draws unwarranted inferences from

Mr. Anderson’s statement, deeming him to have admitted things

      31
      Respondent latches on to the fact that Mr. Anderson, in
his reply, stated that “The issues relating to tax fraud in 1998
and 1999 are exactly the same as the issues in 1995, 1996 and
1997. The exact same fact [sic] and circumstances are
inextricably linked for all the years 1995 to 1999.” However,
the petition itself had stated that the “issues” for 1998 and
1999 “are identical to 1995”--but the petition clearly professes
Mr. Anderson’s innocence as to all five years.
                                - 52 -

that in fact he has explicitly denied.    Mr. Anderson made his

statement (that the facts and issues are “exactly the same” in

all five of the tax years at issue) in the context of professing

his innocence--not admitting his guilt--and of protesting the

application of collateral estoppel to 1998 and 1999.    In essence,

Mr. Anderson argues that he is innocent of tax fraud as to 1995

through 1997 (years for which the charges were dismissed); that

the issues relating to tax fraud in 1998 and 1999 are “exactly

the same” as the issues in 1995 through 1997; and that his

asserted innocence as to the earlier years should therefore be

extrapolated to the later years.    He argues that he is innocent

of tax fraud in 1998 and 1999 and that it would be an “injustice”

to apply the doctrine of collateral estoppel--a mere legal

“technicality” in his eyes--to prevent him from proving his

innocence in those tax years.    While we reject Mr. Anderson’s

argument as to 1998 and 1999 (the years as to which he pleaded

guilty), we decline to hold that his protestations of innocence

in those later tax years somehow constitute a backhanded

admission of guilt in the earlier years.

     Instead, we hold that, on the record now before us,

respondent has failed to show that no genuine issue exists as to

any material fact with respect to the question of whether

Mr. Anderson fraudulently underpaid his Federal income taxes in
                                   - 53 -

1995 through 1997, and respondent’s request for partial summary

judgment with respect to those earlier tax years will be denied.

     We do not hold today that the question of collateral

estoppel is exhausted in this case as to the years 1995 through

1997.        Respondent has failed in his broad attempt to use the

doctrine to invoke Mr. Anderson’s conviction for 1998 and 1999 in

order to impose an ultimate finding of fraud for 1995 through

1997; but a more focused presentation of the facts underlying

Mr. Anderson’s conviction may resolve some of the factual and

legal issues still in the case.        A “plea of guilty * * * is a

conclusive judicial admission of all of the essential elements of

the offense which the indictment charges,” Arctic Ice Cream Co.

v. Commissioner, 43 T.C. 75; and it is possible that such

“elements” could, with a fuller record, be demonstrated to be

relevant to (and binding on) the earlier years.        That is, there

may be facts that were essential to Mr. Anderson’s guilty plea as

to 1998 and 1999, that are relevant to the years 1995 through

1997, and that he would be estopped from denying--but that are

not yet in the record here.32       In addition, Mr. Anderson’s defense

counsel’s statement that “he admits that over the years he

retained control over the assets, and was required under U.S. law

to pay taxes on the gains from those assets”, see supra p. 14,

        32
      See supra note 8 (allegations “incorporated by reference”
into Counts Five and Six of Mr. Anderson’s indictment are not yet
in the record here).
                               - 54 -

may have significance, not yet articulated here, for the years

1995 through 1997.33   For these reasons, today’s partial denial of

respondent’s motion is without prejudice to his renewing that

motion with a better record and more focused contentions.

     To reflect the foregoing,

                                     An appropriate order will be

                                 issued.

     33
      The Court is mindful that if a defendant pleads guilty but
denies particular allegations in the indictment, then collateral
estoppel may not bind the defendant to those denied allegations.
See supra part IV.B.2.b. Of course, what will be relevant in
that connection is Mr. Anderson’s actual denials before the
District Court, rather than his subsequent characterizations of
those denials. Cf. supra note 13.