Extract
Leo M. Ryan, et al., (1998)
T.C. Memo. 1998-62
UNITED STATES TAX COURT LEO M. RYAN, ET AL.,1 Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent Docket Nos. 790-95, 3073-95, Filed February 12, 1998.
3117-95, 3292-95, 3341-95.
Leo M. Ryan, pro se in docket No. 790-05.
Michael A. Mulroney and Marcus Schoenfeld, for petitioner Ronald V. Giongo in docket No. 3073-95.2 Christopher S. Wilson, for petitioner John R. Wilson in docket No. 3117-95.
James G. Cattalo, pro se in docket No. 3292-95.
David A. Grove, pro se in docket No. 3341-95.
Keith L. Gorman, George D. Curran, and Linda A. Love, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION WELLS, Judge:3 Respondent determined deficiencies in, and additions to, petitioners' Federal income taxes as follows: Petitioner Leo M. Ryan (Ryan), docket No. 790-95
Additions to Tax Sec. Sec. Sec. Year Deficiency 6653(b)(1) 6653(b)(2) 6661 1982 $44,993 $22,497 1$11,248 1983 81,653 40,827 1 20,413
Petitioner John R. Wilson (Wilson), docket No. 3117-95
Additions to Tax Sec. Sec. Sec. Year Deficiency 6653(b)(1) 6653(b)(2) 6661 1982 $46,574 $23,287 1$11,644 1983 59,924 29,962 1 14,981 (1) Whether the respective petitioners failed to report income from illegally received money or property in the taxable years 1982 and 1983;5(2) whether the respective petitioners are liable for additions to tax for fraud under section 6653(b)(1) and (2) for the years 1982 and 1983;6 and (3) whether the respective petitioners are liable for the addition to tax under section 6661 for 1982 and 1983.
FINDINGS OF FACT Some of the facts have been stipulated pursuant to Rule 91. The parties' stipulations of fact are incorporated herein by reference and are found as facts in the instant cases. At the time their respective petitions were filed in the instant cases, all petitioners resided in Pennsylvania.
During 1982 and 1983, the years in issue, petitioners were Philadelphia police officers assigned to the 5 Squad. The Philadelphia Police Department was organized on a squad system which included four line squads usually consisting of uniformed officers (called 1 Squad, 2 Squad, etc.), the 5 Squad, and a 6 Squad. The 5 Squad was a narcotics squad within the Philadelphia Police Department which had authority to enforce the ordinances of the City of Philadelphia and the laws of the Commonwealth of Pennsylvania. It also assisted in enforcement in surrounding townships by assisting police from those townships. The 5 Squad's headquarters were located at 39th Street and Lancaster Avenue in Philadelphia (the unit). The Philadelphia Police Narcotics Unit headquarters were located in the Police Administration Building (PAB) at 8th and Race Streets. The 5 Squad was disbanded on or about February 1, 1984. 5 Squad Procedures If a police officer observed a drug transaction, that officer could make an immediate arrest and confiscate the drugs. Otherwise, an officer wishing to make an arrest could do so through the use of a search warrant or through the undercover purchase of illegal drugs. The officer preparing the search warrant was the "assigned officer" for that case.7 For the undercover purchase of illegal drugs, one option was termed "letting the money walk", where the undercover police officer would make the purchase, leave the premises, complete a property receipt for the supposed drugs, and after analysis of the substance, if positive, later arrest the seller with a warrant. The officers would not recover the money used to purchase the drugs as the arrest was not immediate. By letting the money walk and establishing a relationship with that dealer, it might be possible to apprehend individuals higher up in the drug organization. For larger purchases where the authority to let the money walk was not available, a "buy-bust" could be used. Once the dealer produced the drugs, the officer would arrest the dealer and recover the purchase money.
According to departmental procedure, Philadelphia police officers prepared investigation reports for any drug searches or purchases they conducted. The assigned officer was responsible for completing the investigation report. Additionally, arrest reports were prepared for persons arrested, and property seizure reports were prepared for items seized from suspects. Seized items were taken to the evidence room, except that suspecte...
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Leo M. Ryan, et al., (1998) - United States Tax Court - Docket Number: 790-95, 3073-95, 3117-95, 3292-95, 3341-95 - November 06, 2008 - February 12, 1998 - vLex
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