Richard K. and Christine M. McGirl - Page 30

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          intent to mislead which may be inferred from a pattern of                   
          conduct, (9) lack of credibility of the taxpayer's testimony,               
          (10) filing false documents, and (11) dealing in cash.  See Douge           
          v. Commissioner, 899 F.2d 164, 168 (2d Cir. 1990); Bradford v.              
          Commissioner, 796 F.2d 303, 307-308 (9th Cir. 1986), affg. T.C.             
          Memo. 1984-601; Recklitis v. Commissioner, 91 T.C. 874, 910                 
          (1988).  Although no single factor is necessarily sufficient to             
          establish fraud, the combination of a number of factors                     
          constitutes persuasive evidence.  Solomon v. Commissioner, 732              
          F.2d 1459, 1461 (6th Cir. 1984), affg. per curiam T.C. Memo.                
          1982-603.  We note that some conduct and evidence can be                    
          classified under more than one factor.  The sophistication,                 
          education, and intelligence of the taxpayer are relevant to this            
          determination.  Niedringhaus v. Commissioner, 99 T.C. 202, 211              
          (1992).                                                                     
                    a.  Petitioners' Sophistication and Experience                    
               Mr. McGirl attempts to counter evidence of fraud with the              
          defense that he had no accounting or bookkeeping training and was           
          ignorant as to all recordkeeping and tax reporting requirements.            
          We are not impressed with Mr. McGirl's attempt to characterize              
          himself as an inexperienced and unknowledgeable business person.            
          Mr. McGirl has a college education.  He operated a restaurant               
          before petitioners started the Yogurt Station.  The record shows            
          that he managed to accumulate more than $112,000 in savings in              
          just 3 years of the Yogurt Station's operation.  Even if we were            
          to believe in Mr. McGirl's naivete, which we do not, the record             


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