- 61 -
(9th Cir. 1972); Elwert v. United States, 231 F.2d 928, 935 (9th
Cir. 1956). Petitioner used Chemical Traders and Polymer to
divert funds from Resyn for his personal use.
Petitioners contend that Chemical Traders and Polymer were
legitimate businesses. We disagree. Petitioner is collaterally
estopped from so claiming. Even if petitioner were not
collaterally estopped, respondent has clearly shown that
petitioner used Chemical Traders and Polymer to divert and
conceal income from 1964 to 1970.
f. Concealing Income From Return Preparers
Concealing income from a taxpayer's tax preparer can be
evidence of fraud. Korecky v. Commissioner, 781 F.2d 1566,
1569 (11th Cir. 1986), affg. T.C. Memo. 1985-63; Farber v.
Commissioner, 43 T.C. 407, 420, modified 44 T.C. 408 (1965).
Petitioner did not give Levenson or Goldstein records showing
that Chemical Traders existed, that Resyn's payments to Polymer
were for fictitious transactions, that he diverted income from
Resyn to Polymer and Chemical Traders, or how he used funds in
the Polymer and Chemical Traders accounts.
g. False and Misleading Testimony
False, misleading, and inconsistent testimony is a badge of
fraud. Bradford v. Commissioner, supra at 307. Petitioner
falsely testified (i) that Chemicals Traders and Polymer were
legitimate businesses; (ii) that Chemical Traders did business at
128 Clinton Avenue in Newark, New Jersey, and that he was in
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