Mazzei v. Commissioner
United States Tax Court
The taxpayer entered into a conspiracy to produce counterfeit U.S. currency. However, the real intent of two of his coconspirators was to defraud the taxpayer. When the taxpayer provided currency which was supposed to be used in the reproduction process it was taken from him by fraud. Held: While the taxpayer may have sustained a "theft" loss, it was the direct result of the criminal conspiracy on his part.
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The taxpayer entered into a conspiracy to produce counterfeit U.S. currency. However, the real intent of two of his coconspirators was to defraud the taxpayer. When the taxpayer provided currency which was supposed to be used in the reproduction process it was taken from him by fraud. Held: While the taxpayer may have sustained a "theft" loss, it was the direct result of the criminal conspiracy on his part. Therefore, the loss was not an allowable deduction under sec. 165(c)(2) or sec. 165(c)(3), I.R.C. 1954. Luther M. Richey, Jr., 33 T.C. 272 (1959).
1Opinion of the Court
Quealy, Jvdge:
Respondent determined a deficiency in income tax against petitioners for the taxable year 1965 in the amount of $7,676.86. As a result of certain concessions by the parties, the sole question presented for decision is whether the petitioners are entitled to deduct a loss in the taxable year 1965 on account of being defrauded in a scheme to reproduce United States currency. Petitioners claim the deduction under section 165(c) (2)1 or section 165(c) (3).2
findings of fact
Some of the facts have been stipulated, and such facts and stipulated exhibits attached thereto are incorporated…
2Cases cited4 opinions
- Commissioner v. HeiningerSupreme Court of the United States · 1943
- Commissioner v. TellierSupreme Court of the United States · 1966
- Edwards v. BrombergCourt of Appeals for the Fifth Circuit · 1956
- Richey v. CommissionerUnited States Tax Court · 1959
3Cited by17 opinions
- Holt v. CommissionerUnited States Tax Court · 1977
- Uhlenbrock v. CommissionerUnited States Tax Court · 1977
- Holmes Enterprises, Inc. v. CommissionerUnited States Tax Court · 1977
- Blackman v. CommissionerUnited States Tax Court · 1987
- Bilzerian v. United StatesUnited States Court of Federal Claims · 1998
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