1, 19 (1980). Mr. Burke did not file the returns for the taxable years in
issue until March 29, 1991. Mr. Burke filed delinquent returns only after
being contacted by a revenue agent. Mr. Burke also failed to file sales tax
returns for Jury's with the New York State Department of Taxation and Finance.
Misleading a taxpayer's return preparer also constitutes evidence of
fraud. Parsons v. Commissioner, 43 T.C. 378, 395 (1964). Mr. Burke made
numerous misrepresentations to Mr. Silver, his accountant. For instance, he
informed Mr. Silver that his withdrawals of MPC premiums were loans. However,
we have already determined that no loan agreement existed between Mr. Burke
and U.S. Life and that his diversion and use of these premiums were made
without the knowledge and consent of U.S. Life. In addition, when delinquent
returns were prepared, Mr. Burke directed Mr. Silver to deduct embezzlement
losses for funds that he alleged had been misappropriated by Ms. Romano and
Ms. Coleman. Nevertheless, the record contains no evidence establishing that
either individual embezzled any funds from the Burke Insurance Agencies and,
after reviewing the entire record, we are convinced that the embezzlement
alleged by Mr. Burke did not take place.
The destruction of books or records to conceal finances is persuasive
evidence of fraud. Spies v. United States, 317 U.S. at 499; Reynolds v.
Commissioner, T.C. Memo. 1977-181. Mr. Burke instructed Ms. Romano to destroy
insurance agency checkbooks and report them as stolen after he learned that he
was under investigation by the New York State Department of Insurance. Ms.
Romano did not carry out Mr. Burke's instructions.
The omission of income and the commission of other criminal acts are
additional indicia of fraud. Petzoldt v. Commissioner, 92 T.C. at 701-702.
Pursuant to a plea agreement with the Suffolk County District Attorney, Mr.
Burke pleaded guilty to Grand Larceny 4, a felony under New York law, for
failing to file sales tax returns and to remit sales taxes owed from Jury's to
the New York State Department of Taxation and Finance. We have also
determined that Mr. Burke diverted premiums owing to U.S. Life. As the Court
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