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called several witnesses to try to explain Hamalee's separate
books, the witnesses' implausible and inconsistent explanations
leave us with the firm belief that the sole reason for the dual
books was to hide income from the Government.12 To restate what
was stated by the Court of Appeals for the Second Circuit in a
setting of fraud, "We look at the record as a whole which has a
constant drum beat of fraud to which our ears are not deaf."
Geller v. Commissioner, 556 F.2d 687, 691 (1977), affg. T.C.
Memo. 1976-257.
For the foregoing reasons, we hold that: (1) Hamalee is
liable for the additions to its 1985 and 1986 taxes determined by
respondent under section 6653(b)(1) and section 6653(b)(1)(A),
respectively, and (2) the Lees are liable for the additions to
their 1987 and 1988 taxes determined by respondent under section
6653(b)(1)(A) and section 6653(b)(1), respectively. In so
holding, we have considered all arguments made by the parties
and, to the extent not addressed above, have found them to be
without merit.13
12 Mrs. Lee, for example, gave at least five different
answers to the question of why Hamalee had two sets of books, and
why its tax preparers were only given one of those sets.
13 In particular, petitioners cite Kiyono v. Commissioner, a
(continued...)
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