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income from his and Betsy’s joint tax returns. Petitioner
controlled the situation and knew what was happening with regard
to the omitted income. Petitioner’s claim that he was merely
acting for Betsy, and implicitly that any blame should be shifted
from him to Betsy, is belied by the record. The transparent
falseness of petitioner’s effort is itself an indicator of
petitioner’s fraudulent intent. Bahoric v. Commissioner, 363
F.2d 151, 153-154 (9th Cir. 1966), affg. T.C. Memo. 1963-333;
Boyett v. Commissioner, 204 F.2d at 208.
Respondent contends that petitioner’s role in the Sley
Corporations’ payments of salaries to Betsy and Ben is
significant because it “bear[s] upon his [petitioner’s] attitude
toward reporting and paying taxes generally.” Petitioner points
out that Betsy and he reported all of Betsy’s salary receipts on
their joint tax returns, and contends that “Betsy’s salary is
neither a badge of fraud nor relevant to this case.” After
examining the record in the instant case, we conclude that the
most significant elements of the salary matter are (1)
petitioner’s role in the salary determinations and (2)
petitioner’s contentions regarding that role. We do not decide
whether the payments were salary or whether the payments were
fraudulent.31
31 We note that the question of whether the amounts paid
to Betsy as salary really were salary or really were dividends
(continued...)
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