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Elvin disguised his personal expenses as YOC's business expenses.
Elvin also used YOC funds to purchase personal assets (e.g., the
Capriole and the Sea Ray Boat) and to pay expenses associated
with those assets.
Elvin had substantial experience in business and financial
activities. During the years in issue, under Elvin's direction
and control, YOC's profits increased significantly each year.
Elvin was advised by YOC's accountants that it was inappropriate
and risky to pay personal expenses with corporate funds. Elvin
did not take this advice, and he continued to use YOC's funds for
his personal benefit.
In light of the evidence before us, it is evident, and we so
hold, that Elvin knew that he received taxable income
substantially in excess of that reported on his 1983, 1984, 1985,
and 1986 Federal income tax returns and that Elvin consciously
intended to commit fraud when those returns were filed. We
conclude that Elvin filed fraudulent Federal income tax returns
for 1984, 1985, and 1986.
The same conduct that forms the basis for Elvin's liability
for fraud relates to YOC's liability for fraud for 1983, 1984,
and 1985. A corporation can only act through its officers. See
DiLeo v. Commissioner, 96 T.C. 858, 875 (1991). Elvin was
responsible for the day-to-day operation of YOC, and Elvin was
involved in all major business decisions that were made on behalf
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