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companies and that totaling the Forms 1099 was the most accurate
way to determine gross receipts. In fact, petitioner's patients
often paid him directly in cash and by check.
Petitioner told Mr. Jung that he had bank accounts only at
American Pacific State Bank. In fact, petitioner had another
bank account--petitioner's SPB account--which Mr. Jung discovered
on his own during the audit. This is evidence of fraud.
7. Lack of Credibility of Petitioner'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 309, 312 (5th Cir. 1984),
affg. T.C. Memo. 1984-25. Petitioner's testimony often consisted
of answers like: "I, you know, I can't, I don't, I can't
recall," and "I don't remember that, no, I don't know. I must
have. I'm not sure." In fact, petitioner seemed to know very
little very often. Petitioner also was reluctant to testify.
Petitioner's testimony, when taken as a whole, demonstrated his
lack of credibility and is evidence of fraud.
8. Other Factors
Petitioner had two employees during the years in issue. He
paid those employees in cash; he did not file employment tax
returns; and he failed to pay their employment taxes. Petitioner
knew that employment tax returns were due because he had filed
them in earlier years. Petitioner also failed to file
information tax returns for these employees.
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