- 48 -
The failure to keep records of all earnings may be material
evidence of fraud. Otsuki v. Commissioner, supra at 109; see
also Baumgardner v. Commissioner, 251 F.2d 311, 314 (9th Cir.
1957), affg. T.C. Memo. 1956-112. To hold otherwise would, as
the Supreme Court stated in United States v. Johnson, 319 U.S.
503, 518 (1943), "be tantamount to holding that skillful
concealment is an invincible barrier to proof". During the years
at issue, petitioner failed to maintain adequate books and
records with respect to his financial consulting activity as
required by law. Sec. 6001; sec. 1.6001-1, Income Tax Regs. In
addition, petitioner failed to provide his tax adviser and return
preparer with the records he did maintain.
Petitioner's conviction under section 7206(1) is also
probative that petitioner intended to evade taxes for 1982 and
1983. Wright v. Commissioner, 84 T.C. 636, 643-644 (1985).
For the reasons stated above, we hold that petitioner is
liable for the additions to tax for the tax years 1982, 1983, and
1984 pursuant to section 6653(b)(1).
(b) Section 6653(b)(2)
(...continued)
Newtowne were not income.
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