George v. Comm’r of Internal Revenue, No. 15-2305 (1st Cir. 2016)Annotate this Case
Daniel George, a self-taught chemist who created his own health supplements, was convicted of tax evasion based on his failure to pay taxes for the tax years 1996 through 1999. Six weeks after his tax evasion indictment, George incorporated Biogenesis Foundation, Inc. George then applied for tax-exempt status for Biogenesis as a charitable organization. The IRS granted Biogensis’s application in 2003. In 2011, Biogenesis retroactively filed tax forms claiming it was a section 26 U.S.C. 501(c)(4) organization for the tax years 1996 through 2002. Thereafter, the IRS issued a notice of deficiency to George, stating that he owed $3.790 million in income taxes and penalties on $5.65 million in bank deposits he made and interest earned for the tax years 1995 through 2002. George petitioned for review, asserting that the income earned for those tax years was not his but Biogenesis’s. The tax court rejected George’s arguments and found George liable for the full amount of the alleged deficiency. The Supreme Court affirmed, holding that the tax court did not err in determining that an organization distinct from George did not exist during the applicable tax years.