John B. Mathers, Sr. - Page 13

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               First, as indicated above, petitioner's contention that the            
          distributions represented loan repayments to him is unsupported             
          by any independent evidence and is contradicted by the corporate            
          tax returns that he prepared and filed.  Second, in view of his             
          business experience, it is not credible that he believed that               
          over a period of 13 years he could withdraw substantial sums of             
          money from the corporation for his living expenses, report no               
          income from the services that he performed on behalf of the                 
          corporation or dividends from the corporation, and have no income           
          tax liability and no obligation to file tax returns.  His                   
          position in this regard is too untenable to be believed.                    
               Petitioner also had experience in this Court, as reflected             
          in an opinion rendered not long before he commenced his pattern             
          of failing to file returns.  See Mathers v. Commissioner, 57 T.C.           
          666 (1972).  Petitioner apparently was sufficiently knowledgeable           
          to prepare the corporate tax returns, and he has not suggested              
          that he relied on any professional advice that he had no                    
          obligation to file individual returns.  Under these                         
          circumstances, the use of the corporation to pay his personal               
          expenses is clear and convincing evidence of fraud.  See Benes v.           
          Commissioner, 42 T.C. 358, 384 (1964), affd. 355 F.2d 929 (6th              
          Cir. 1966); Hedlund v. Commissioner, T.C. Memo. 1993-455; Kahrahb           
          Restaurant, Inc. v. Commissioner, T.C. Memo. 1992-263.                      
               We are convinced that petitioner underpaid taxes due for the           
          years in issue when he failed to report as income the                       

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