- 20 - that are in conformity with the false documents, there is clear and convincing evidence of fraud. See Cantor v. Commissioner, T.C. Memo. 1957-173. Petitioner relies on Badias & Seijas, Inc. v. Commissioner, T.C. Memo. 1977-118, to support its position that the backdated and erroneous minutes should be overlooked when the motivation for preparing the minutes was mistake or misunderstanding. In Badias & Seijas, a corporation sold its sole asset, a restaurant. The shareholder of the corporation made several errors on the final tax return for the corporation. The errors included failing to indicate that the corporation had sold its sole asset, failing to designate the tax return as a final return, and listing the shareholder as a 50-percent shareholder when he was the 100-percent shareholder. The Court determined that the corporation had adopted an informal plan of liquidation notwithstanding the errors on the tax return, because the errors did not affect the actual events constituting adoption of the plan. The instant case is distinguishable from Badias & Seijas. The taxpayer's actions in Badias & Seijas conformed to section 337, even if the documents did not. In this case, the minutes are not merely an inaccurate representation of actual events; they are a fabrication of events. Briggs knew that he did not participate in a vote to liquidate ACT on or before the sale date of the assets to JSL, but he prepared minutes to the contrary.Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
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