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Petitioners’ failure to provide a plausible explanation of their
behavior with regard to the calculation of the figures provided
to their tax preparer is indicative of fraud. See id. at 307.
Petitioners represented on several loan applications with
various financial institutions during the years in issue that
they had vastly larger incomes than they had represented either
to Greenfield in the course of his preparation of their returns
for those years or to the IRS. They also provided a copy of a
purported 1998 tax return to Redding Bank that showed income four
times the amount that was actually reported to the IRS for 1998.
Petitioners argue that the inconsistent information that they
provided to financial institutions consisted of “mere estimations
of their income” and thus should not be viewed as evidence of
fraudulent intent to conceal income from the IRS, to which
petitioners reported substantially lower incomes. However, the
large discrepancies in the income that petitioners reported to
the IRS and the income reported to the lending institutions,
coupled with the 1998 tax return submitted to Redding Bank that
was selectively altered to show four times more income to
petitioners than the return that was actually filed with the IRS
for 1998, are convincing evidence of petitioners’ dishonesty and
of fraudulent intent to conceal income from the IRS. Petitioners
have not presented any plausible explanation of these
discrepancies.
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