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Petitioners had repeated discussions with their real estate
agents and Mr. Clack about the identification requirement and the
need to adequately identify replacement property. Mr. Clack
advised petitioners of the need to acquire property that had been
identified during the 45-day period. Mr. Van Voorhis and other
real estate agents counseled petitioners to have written
documentation of their identification. When Mr. Van Voorhis
first showed Pleasant Hill to petitioners, he informed them that
it could not qualify as replacement property because it was not
timely identified. A letter attached to the exchange agreement
clearly informed petitioners of the need to identify property
within 45 days of the sale of the Antioch property.
We find in this setting petitioners cannot rely on Mr.
Clack's advice as an excuse for their fraudulent conduct. They
knew their actions were fraudulent because of the repeated advice
they received. Petitioners were not misled into committing fraud
by their attorney, as they contend. See Medieval Attractions
N.V. v. Commissioner, T.C. Memo. 1996-455. We consider it
probative that petitioner husband pleaded guilty to submitting
false documents to respondent's revenue agent in violation of
section 7207. Although this conviction does not alone establish
fraudulent intent to evade taxes, it is evidence of petitioner
husband's intent and propensity to defraud. Petzoldt v.
Commissioner, 92 T.C. 661, 701-702 (1989); Alvarez v.
Commissioner, T.C. Memo. 1995-414.
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