Mazzei v. Commissioner

61 T.C. 497 (1974)

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Nature of the Case

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Facts

P operated a sheet metal company in partnership with his brother. Vernon Blick was an employee of the company in 1965 and had been an employee for 4 or 5 years. Blick was told by a man named Cousins of a scheme for reproducing money. Cousins introduced Blick to two other men named Collins and Joe. Collins and Joe showed Blick a black box that they asserted was capable of reproducing money. The black box was approximately 15 inches long, 8 or 10 inches wide, and 6 inches deep, about the size of a shoebox. It was made of metal and had a handle on it. Blick gave Collins a $ 10 bill which Collins took and placed between two pieces of white paper of about the same size. Collins put the money and the paper into the box and connected the box to an electric outlet. The black box began a buzzing sound which continued for about 10 minutes. Then Collins reached into the box and pulled out Blick's $10 bill and what appeared to be a new $ 10 bill. Blick fell for it hook, line, and sinker. P and Blick discussed a 'deal' to reproduce money. P was contacted several times concerning further arrangements for reproducing money. P went to a meet with $10,000 in cash. Cousins telephoned Collins and Joe who then came over with the black box. P gave Collins a $100 bill and Collins went through the 'reproduction' process and returned the original and a new $100 bill. P wanted to go full steam ahead but Collins said he didn’t have the right kind of paper to keep doing it. P got $700 reproduced and was only returned the $700 plus $300 in new bills because there was not enough paper. P was called a week later and told to get $20k in bills as the deal was on. Blick got another $5000 in cash. P got the $20k by cashing a company check. Collins put on a show at an apartment in New York City. Right at the beginning of the process, two armed men broke into the room impersonating law enforcement officers making a counterfeiting raid. P and Blick were held at gunpoint. Joe was handcuffed. P broke away and contacted the real police. Meanwhile, the con artists left the room with the money. Blick was told he would be shot if he attempted to get the money. It was all a con. P reported the money as a loss due to theft. D determined a deficiency against P. P petitioned the tax court.