- 20 -
So that at the time that the statement was made, I
think--I don't recall the exact words, but it was
indicated that amounts were advanced, in other words,
which were repaid during the current year or in
subsequent years.
This testimony does not in any way exonerate petitioner.
"Rerouting" funds received from Bergman & Barth would not make
them nontaxable. To the contrary, petitioner's "rerouting"
transactions, in the context of the entire record of how he used
multiple entities and devices to minimize or avoid taxes, are
evidence of an intent to conceal income. Petitioner's prior
admissions of income from the firm of at least $225,000 for each
of the years in issue, made on various financial statements,
belie the later claims that he received only loans and no
significant taxable income from the firm. From petitioner's
statement that he "went through" the analysis with Timbie and
Onofrio, we infer that they simply accepted petitioner's
representations that certain amounts were loans.
In this case, petitioner cannot hide behind his employment
of others belatedly to prepare his returns. He did not provide
accurate, complete, or comprehensible records to the persons that
he employed to prepare the returns. See Scallen v. Commissioner,
supra at 1371; Foster v. Commissioner, 391 F.2d 727 (4th Cir.
1968), affg. in part and revg. in part T.C. Memo. 1965-246;
Estate of Temple v. Commissioner, 67 T.C. 143, 162 (1976).
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