- 20 - activity. Bradford v. Commissioner, 796 F.2d 303, 307 (9th Cir. 1986), affg. T.C. Memo. 1984-601; see Douge v. Commissioner, 899 F.2d 164, 168 (2d Cir. 1990). These "badges of fraud" are nonexclusive. Miller v. Commissioner, supra at 334. Both the taxpayer's background and the context of the events in question may be considered as circumstantial evidence of fraud. United States v. Murdock, 290 U.S. 389, 395 (1933); Spies v. United States, supra at 497; Plunkett v. Commissioner, supra at 303. Respondent argues that petitioners knowingly failed to report $81,000 ($60,000 plus $21,000) for 1983 and that petitioner pled guilty to violating section 7206(1) with respect to the $21,000 item. Although petitioner pled guilty to violation of section 7206(1), he is not estopped to deny that his 1983 tax return was fraudulent within the meaning of section 6653(b). Wright v. Commissioner, 84 T.C. 636 (1985). Petitioner, however, is estopped to deny that he filed a materially false return under section 7206(1). Id. Petitioners do not deny that the $81,000 was omitted; however, they assert that they failed to claim more than $80,0004 of deductions on their 1983 return. The $81,000 omission is probative evidence. Petitioners' contention that they were entitled to unclaimed and offsetting deductions for 1983 does not lessen the impact of petitioners' intentional failure to report income. 4 We have found that the amount allowable for 1983 totals $33,000.Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
Last modified: May 25, 2011