- 19 -
d. Intent To Mislead
Misleading statements to an investigating agent may be
evidence of fraud. Gajewski v. Commissioner, supra at 200.
Dr. Rao did mislead the IRS agents when he told them that he
received no income directly from patients and that all of his
income was from insurance companies or third party providers.
e. Credibility of Dr. Rao's Testimony
A taxpayer's lack of credibility, inconsistent testimony, or
evasiveness are factors in considering the fraud issue.
Toussaint v. Commissioner, 743 F.2d at 312. Dr. Rao's testimony
was basically consistent and credible. Even if Dr. Rao's
testimony is not credible in all respects, we may still be left
with no more than a suspicion of fraud. See Jenkins v.
Commissioner, T.C. Memo. 1995-563.
f. Other Factors
Dr. Rao provided his accountant, Mr. Raclaw, with all of the
information necessary to compute gross income for his Schedule C
business. A taxpayer's reliance upon his accountant to prepare
accurate returns may indicate an absence of fraudulent intent.
Marinzulich v. Commissioner, 31 T.C. 487, 490 (1958). However,
the taxpayer must provide his accountant "with all of the data
necessary for maintaining complete and accurate records".
Merritt v. Commissioner, 301 F.2d 484, 487 (5th Cir. 1962), affg.
T.C. Memo. 1959-172. Dr. Rao willingly provided Mr. Raclaw with
Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: May 25, 2011