- 15 -- 15 -
Commissioner, T.C. Memo. 1991-265, affd. without published
opinion 999 F.2d 1579 (5th Cir. 1993); Dahlstrom v. Commissioner,
T.C. Memo. 1991-264, affd. without published opinion 999 F.2d
1579 (5th Cir. 1993); Able Co. v. Commissioner, T.C. Memo. 1990-
500. But see Spencer v. Commissioner, T.C. Memo. 1994-531;
Denali Dental Serv. v. Commissioner, T.C. Memo. 1989-482; Pauli
v. Commissioner, T.C. Memo. 1989-481.
Petitioners, citing United States v. Claiborne, 765 F.2d
784, 798 (9th Cir. 1985), argue that they did not have the
requisite fraudulent intent to conceal their income because they
in good faith relied on the advice of Howard, Armstrong, Green,
and Panatelli to the effect that their offshore trust program was
a legitimate tax shelter.
We disagree. Petitioners falsely reflected the withdrawals
from CCMI and the deposits to the trust bank accounts as payroll
expenses of CCMI. Petitioners attempted to conceal the $184,630
they used to purchase the Oyster Pond Property through a sham
loan transaction. Petitioners participated in a pattern of
fraudulent underreporting of income in 1984 and 1985 that we
believe began in 1983, if not earlier. We conclude that the
underpayment of petitioners’ income tax for 1983 resulting from
their participation in the sham offshore trust program was due to
fraud. See Akland v. Commissioner, supra at 622; Dahlstrom v.
Commissioner, T.C. Memo. 1991-264.
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