- 48 -
otherwise doublecheck the journal entries made by the
bookkeepers. The evidence points to the contrary.
* * * [Estate of Temple v. Commissioner, 67 T.C. at
162-163; citation and fn. ref. omitted.]
See also Webb v. Commissioner, 394 F.2d at 379-380; Foster v.
Commissioner, 391 F.2d 727-732 (4th Cir. 1968), affg. on this
issue and revg. on another issue T.C. Memo. 1965-246; Roose v.
Commissioner, T.C. Memo. 1995-585, affd. without published
opinion 108 F.3d 1377 (6th Cir. 1997); Morris v. Commissioner,
T.C. Memo. 1992-635, affd. without published opinion 15 F.3d 1079
(5th Cir. 1994); Becerra v. Commissioner, T.C. Memo. 1984-134.
For 1985, 1986, and 1987, respondent has presented clear and
convincing evidence of fraud as to both petitioners relating to
unreported gross receipts of the nursery. For 1988 and 1989,
respondent has presented clear and convincing evidence of fraud
with respect to Mr. Gandy. The evidence is also clear and
convincing that petitioners used cash to conceal income and
assets. That they may also have used cash for deductible
expenses was, in our view, in furtherance of their fraudulent
activities. Thus, we are convinced that the entire net
underpayments, after adjustment of the nursery income as set
forth below, are due to fraud. The statute of limitations,
therefore, does not bar assessment for any year, and the
additions to tax and penalties for fraud will be sustained for
each year.
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