Précis: Mr. Melman omitted to include $15,080,000.00 in dividends (yielding $18,850,000.00 in taxable dividends) in his 2007 tax return filed in April of 2008. This resulted in an understatement of his tax payable by a factor of 12.5. The Court found that Mr. Melman was a highly educated, meticulous person who planned his tax affairs in consultation with his accountants and had set aside a reserve fund for his 2007 taxes in the amount of $4,725,000.00. However he claimed not to have reviewed his 2007 return before signing it and only paid $359,604.43 based on the return filed.
Melman v. R. - TCC: $18.85 million in dividend income unreported, gross negligence penalties sustainedREAD MORE »