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With regard to whether petitioner intended to evade taxes
known to be owing by conduct intended to conceal, mislead, or
otherwise prevent the collection of taxes, we must look at Mr.
Golden’s conduct to determine whether it exhibited any of the
“badges of fraud”.
Petitioner’s ledgers were set up in such a way that neither
income nor expenses were recorded. The ledger recorded the loads
that the drivers had transported and the gross amounts received
by petitioner from the contracting companies as consideration for
the transportation of those loads. These gross receipts were
then reduced by expenses that petitioner charged to the driver.
The driver would then receive a check for the net proceeds. The
ledgers did not indicate the cost to petitioner of the various
expenses that were deducted from the drivers’ checks. The
ledgers did not indicate the markup on petitioner’s various
expenses. Yet Mr. Golden testified that he was aware that there
was a markup and aware that petitioner was earning a profit on
these items. This profit was not recorded anywhere in
petitioner’s books or records.
Further, Mr. Golden, on behalf of petitioner, directed Mr.
Jackson, petitioner’s tax return preparer, to claim that
petitioner’s expenses were equal to its income, despite the fact
that Mr. Golden testified that he had a “fee” that he charged for
everything and that he charged the drivers a brokerage
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