U.S. Tax Court Partially Upholds IRS Fraud Determination, Allows Spouse to Contest Fraud for Limitations Purposes

The U.S. Tax Court held that a taxpayer’s criminal conviction under I.R.C. §7201 for tax evasion collaterally estopped him from denying civil fraud penalties under I.R.C. §6663 for the same tax years, granting the IRS’s motion for partial summary judgment as to the taxpayer. Taxpayer, a physician who operated a medical practice, was convicted of tax evasion under IRC §7201 after a federal grand jury found he ran what was essentially a pill mill, accepting substantial cash payments from patients and keeping two sets of books to conceal income from the IRS. The IRS subsequently issued a notice of deficiency ...