- 61 -
of YOC, and Elvin instructed YOC's employees to pay his personal
expenses.
Every adjustment that we have sustained in this case relates
to transactions that occurred between Elvin and YOC. Elvin also
signed YOC's 1983 corporate Federal income tax return. Although
Elvin did not sign YOC's 1984 and 1985 corporate Federal income
tax returns, Elvin was advised by YOC's employees to stop paying
personal expenses with YOC's funds. In light of the evidence in
this case, it is evident, and we so hold, that Elvin's conduct
led to the filing of fraudulent corporate Federal income tax
returns of YOC and that Elvin had knowledge of the erroneous
items that were reported thereon.
For 1983, 1984, and 1985, we conclude that Elvin was fully
aware of the falsity of and of the underreporting of income that
were reflected on YOC's income tax returns.
Respondent has established by clear and convincing evidence
that some portion of Elvin's income tax deficiencies for 1983,
1984, 1985, and 1986, and of YOC's income tax deficiencies for
1983, 1984, and 1985 is due to fraud. For 1983, 1984, and 1985,
respondent, under section 6653(b)(1), need only prove that some
portion of the underpayment is due to fraud. Therefore, for
1983, 1984, and 1985, Elvin and YOC are liable for the section
6653(b)(1) additions to tax for fraud on the entire underpayments
that we have determined herein.
Page: Previous 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 NextLast modified: May 25, 2011