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him and that his failure to file income tax returns reporting
that income and to pay tax on the income are due to fraud.
The issues of taxability of the payments and fraud turn on
the credibility of petitioner's claim that the disbursements on
his behalf were repayments to him of loans previously made to the
corporation. Petitioner's contentions in the context of this
case are simply not credible. He presented no contemporaneous
documentation that the distributions for his benefit during the
years in issue were intended to be repayments of loans.
Payments for the Benefit of Petitioner
At trial, the evidence introduced by petitioner consisted
primarily of his uncorroborated testimony. We are not required
to accept petitioner's testimony that is improbable or vague.
See Geiger v. Commissioner, 440 F.2d 688, 689-690 (9th Cir.
1971), affg. T.C. Memo. 1969-159. His testimony is contradicted
by the minimal records that he created. The Federal income tax
returns prepared by petitioner for FBI do not show a
contemporaneous intent to treat the payments from FBI as loan
repayments. From January 1, 1980, to December 31, 1985,
petitioner showed a reduction of only $36,000 in the loans from
stockholders entry on the returns he prepared for FBI, while
payments by FBI for petitioner's sole benefit totaled
approximately $239,000 for the same period. Larger adjustments
to the loans from stockholders balance were not reflected until
the amended returns were prepared and filed by Burden after the
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