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Checkpoint Contents Federal Library Federal Source Materials Federal Tax Decisions Tax Court Memorandum Decisions
Tax Court & Board of Tax Appeals Memorandum Decisions (Prior Years) 1995 TC Memo 1995-448 - TC Memo 1995-409
Jose A. Alvarez, et ux., TC Memo 1995-414, Code Sec(s). 6013; 6501; 6651; 6653; 6661; 6662, 8/24/1995
Tax Court & Board of Tax Appeals Memorandum Decisions
Jose A. Alvarez, et ux. v. Commissioner, TC Memo 1995-414 , Code Sec(s) 6501.
JOSE A. ALVAREZ AND WANDA ALVAREZ. Case Information:
Code Sec(s): | 6501 |
Docket: | Dkt. No. 2849-91. |
Date Issued: | 8/24/1995. |
Judge: | Opinion by Laro, J. |
Tax Year(s): | Years 1982, 1983, ...view middle of the document...
S. Individual Income Tax Return, using the status of "Married filing joint return". For each of his 1985 through 1987 and 1989 taxable years, Mr. Alvarez untimely filed a Form 1040 using the status of "Married filing separate return".
Drug-Dealing Activities Involving Mr. Alvarez
Mr. Alvarez was the subject of a criminal investigation conducted by a multiagency task force (Task Force). The Task Force's investigation culminated on October 3, 1985, with the arrest of Mr. Alvarez, Adolph V. Carbone, and approximately 66 other suspects. Mr. Alvarez was charged with conspiracy to distribute cocaine, Mr. Alvarez was later acquitted of these charges.
Mr. Carbone was Mr. Alvarez' client. During the 2-month period ending on August 31 , 1985, Mr. Carbone purchased 3 or 4 kilograms of high-quality cocaine from Mr. Alvarez at a cost ranging from $40,000 to $43,000 per kilo. Mr. Alvarez "fronted" (consigned) the kilos to Mr. Carbone, and Mr. Alvarez received cash payments for each front shortly afterwards. On one occasion, Mr. Carbone paid $43,000 to Mr. Alvarez at his residence in Bayville, New Jersey. Mrs. Alvarez was present at the residence when the cash payment was made.
Mr. Alvarez was arrested at his residence. A search of his residence at that time uncovered loaded weapons with at [pg. 95-2498] least nine rounds of ammunition, approximately 1 ounce of marijuana, an envelope containing $4,000 in cash, another envelope containing two safe deposit box keys, and a notebook ledger. The ledger contained numerous handwritten entries indicating that the aggregate value of assets held by petitioners in accounts, investments, and cash was $1,052,166.
On October 4, 1985, law enforcement authorities used the keys found at Mr. Alvarez' residence to search the two safe deposit boxes. In the boxes, the authorities found: (1) $551,000 in cash and (2) bank passbooks and certificates of deposit totaling $92,772. On the same day, Mrs. Alvarez removed the contents from three safe
deposit boxes of petitioners, one in Newark, New Jersey, and the other two in Jersey City, New Jersey. In order to gain entry to the third box, Mrs. Alvarez made misrepresentations to bank officials, who drilled the box open at her request. When Government officials later searched the three boxes, the boxes were empty.
On April 13, 1989, a Federal grand jury indicted Mr. Alvarez on three counts of fraud under section 7206(1), for willfully making false statements in connection with petitioners' 1982 through 1984 joint income tax returns. On November 22, 1989, Mr. Alvarez pleaded guilty to one count of making a false statement on the 1982 joint return in violation of section 7207.
Petitioners failed to maintajrLadequate books andresQcds during the years in issue. Respondent reconstructed Mr. Alvarez' 1985 through 1987 and 1989 taxa^te4B€Qme-tbrough.theJ3ank deposits method.
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