T.C. Memo. 1997-82
UNITED STATES TAX COURT
JEFF R. TAYLOR, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 8493-96. Filed February 18, 1997.
John C. Meaney, for petitioner.
Shirley M. Francis, for respondent.
MEMORANDUM OPINION
PARR, Judge: Respondent moves for partial summary judgment
under Rule 121,1 arguing that petitioner's plea of guilty to
criminal fraud under section 7201 collaterally estops him from
1
All section references are to the Internal Revenue Code in
effect for the taxable year in issue, and all Rule references are
to the Tax Court Rules of Practice and Procedure, unless
otherwise indicated. All dollar amounts are rounded to the
nearest dollar.
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rebutting her determination for the taxable year 1987 that he is
liable for civil fraud under section 6653(b) for filing a false
and fraudulent income tax return with the intent to evade income
tax. Respondent further maintains that the deficiency in income
tax and the additions to tax due from petitioner for 1987 may be
assessed at any time under section 6501(c)(1). Respondent
supports her motion with two exhibits; namely, (1) a grand jury
indictment (Indictment) of petitioner and (2) petitioner's plea
agreement (Plea Agreement).
Petitioner asserts that the doctrine of collateral estoppel
does not apply for 1987, because he pleaded guilty under duress,
and that the 3-year limitation period under section 6501(a) bars
the assessment and collection of the deficiency and additions to
tax for 1987.
The respondent's motion for partial summary judgment is
based on the pleadings filed in this case.
We must decide whether petitioner is collaterally estopped
from contesting that the deficiency in his income tax for 1987
was due to fraud within the meaning of section 6653(b) on account
of his plea of guilty to a violation of section 7201. We hold he
is.
Background
Respondent determined a deficiency in, and additions to,
petitioner's Federal income tax for the taxable year 1987 as
follows:
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Additions to Tax
Year Deficiency Sec. 6653(b)(1)(A) Sec. 6653(b)(1)(B) Sec. 6661
1987 $67,508 $50,631 50 percent of the $16,877
interest due on
$67,508
Petitioner resided in Tigard, Oregon, at the time he
petitioned this Court to redetermine respondent's determination
of a deficiency in his income tax and additions to tax as set out
above. For 1987, respondent determined that petitioner had
$199,796 of unreported income.2
The petitioner herein was the defendant in the criminal case
of United States v. Taylor, which was docketed in the U.S.
District Court for the District of Oregon.
Petitioner was indicted on April 14, 1993, with respect to
the criminal matter. The indictment charged that petitioner
knowingly and willfully attempted to evade Federal income tax for
1987 by filing a false and fraudulent joint Federal income tax
return in violation of section 7201. The indictment charged that
petitioner and Janet Taylor reported taxable income of $0, and a
tax due and owing of $0 on their 1987 joint Federal income tax
return (Form 1040), knowing that their taxable income for 1987
was substantially in excess of such amount.
2
Respondent's motion is for partial summary judgment with
respect to the issue of civil fraud pursuant to sec. 6653(b).
The amount of the underlying deficiency for 1987 remains to be
adjudicated.
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In connection with the criminal case, petitioner, who was
represented by counsel, pleaded guilty on December 6, 1993, to
tax evasion for 1987 in violation of section 7201 in return for a
recommendation of a lenient sentence.
Prior to sentencing, petitioner moved to withdraw his guilty
plea and requested that the court grant him a jury trial on the
ground that his guilty plea was coerced and involuntary, thus
violating both his First and Fifth Amendment rights. The
District Court denied petitioner's motion. The Court of Appeals
affirmed the conviction, and the United States Supreme Court
denied review.
Petitioner ultimately served 3 years' probation, with 4
months of home detention while attending graduate school in
Phoenix, Arizona.
Discussion
Summary judgment is intended to expedite litigation and
avoid unnecessary and expensive trials. Florida Peach Corp. v.
Commissioner, 90 T.C. 678, 681 (1988). Rule 121(a) provides that
either party may move for summary judgment upon any or all parts
of the legal issues in controversy. When either party makes such
a motion, the opposing party must file "An opposing written
response, with or without supporting affidavits, * * * within
such period as the Court may direct." Rule 121(b). A decision
on the merits of a party's claim will be rendered by way of
summary judgment "if the pleadings, answers to interrogatories,
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depositions, admissions, and any other acceptable materials,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that a decision may be
rendered as a matter of law." Id.; 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
there is no genuine issue of material fact, and factual
inferences are viewed in the light most favorable to the
nonmoving party. United States v. Diebold, Inc., 369 U.S. 654,
655 (1962); Preece v. Commissioner, 95 T.C. 594, 597 (1990). The
existence of any reasonable doubt as to the facts will result in
denial of the motion for summary judgment. Hoeme v.
Commissioner, 63 T.C. 18, 20 (1974).
The instant case is ripe for partial summary judgment. It
is well established that petitioner's conviction of criminal tax
evasion, under section 7201, collaterally estops him from denying
that the deficiency in his income tax for the year in issue was
due to fraud for purposes of section 6653(b). DiLeo v.
Commissioner, 96 T.C. 858, 885-886 (1991), affd. 959 F.2d 16 (2d
Cir. 1992). The elements of criminal tax evasion under section
7201 are not dissimilar to the elements of civil tax fraud under
section 6653(b), and a guilty plea is equivalent to a conviction
after trial for the purpose of collateral estoppel. See, e.g.,
Johnson v. Sawyer, 47 F.3d 716, 722 (5th Cir. 1995); Gray v.
Commissioner, 708 F.2d 243 (6th Cir. 1983), affg. T.C. Memo.
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1981-1; Brooks v. Commissioner, 82 T.C. 413, 431 (1984), affd.
without published opinion 772 F.2d 910 (9th Cir. 1985); Amos v.
Commissioner, 43 T.C. 50 (1964), affd. 360 F.2d 358 (4th Cir.
1965). Moreover, it is generally assumed that a guilty plea is
made voluntarily. Huff v. Commissioner, T.C. Memo. 1988-564.
In the case at bar, it is uncontroverted that the
petitioner, a college graduate with several years of experience
in business, who was represented by counsel, pleaded guilty to a
charge of tax evasion, under section 7201 for 1987. Petitioner
asserts, however, that the Supreme Court, in Montana v. United
States, 440 U.S. 147, 155, (1979), expressly states that prior to
invoking collateral estoppel, a court should inquire into any
special circumstances which would warrant "an exception to the
normal rules of issue preclusion". It is petitioner's position
that his allegedly coerced and involuntary plea of guilty to
fraud for 1987 is such an exceptional circumstance. We disagree.
Petitioner raised the issue of coercion on appeal and failed
to persuade the Court of Appeals, which affirmed his conviction,
and the Supreme Court denied review. The judgment in his
criminal case is final. We caution petitioner's counsel that his
objection to respondent's motion borders on the behavior
proscribed by section 6673(a)(2)(A) (in regard to multiplying the
proceedings unreasonably) and Rule 33(b) (in regard to signing a
pleading not well grounded in fact nor warranted by existing law,
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and interposed for an improper purpose), and may invite
sanctions.
We thus hold that petitioner is estopped from denying, for
purposes of this case, that he filed a false and fraudulent
Federal income tax return, with the intent to evade income tax
for 1987.
Finally, because petitioner's fraudulent intent, for
purposes of the additions to tax under sections 6653(b)(1)(A) and
(B) has been established for 1987, it follows that the assessment
and collection of the deficiency in income tax and the additions
to tax are not barred by the expiration of the statutory
limitation period. Sec. 6501(c)(1).
Respondent's motion for partial summary judgment will be
granted.
To reflect the foregoing,
An appropriate order
will be issued.