- 10 -
Commissioner, 75 T.C. 1, 20 (1980); the filing of false
documents, Stephenson v. Commissioner, 79 T.C. 995, 1007 (1982),
affd. 748 F.2d 331 (6th Cir. 1984); understatement of income,
inadequate records, failure to file tax returns, implausible or
inconsistent explanations of behavior, concealment of assets, and
failure to cooperate with tax authorities. Bradford v.
Commissioner, 796 F.2d 303 (9th Cir. 1986), affg. T.C. Memo.
1984-601; Korecky v. Commissioner, supra.
The taxpayer's education and sophistication are also
relevant to the determination of fraud. Halle v. Commissioner,
175 F.2d 500, 503 (2d Cir. 1949), affg. 7 T.C. 245 (1946);
Niedringhaus v. Commissioner, 99 T.C. 202, 211 (1992).
Petitioner admits that she failed to report income of
$57,470 in 1984 and $18,524 in 1985. Accordingly, pursuant to
section 6653(b)(1), respondent has proven that an underpayment of
tax exists for each of the years in issue. Thus, we now must
decide whether petitioner intended to conceal, mislead, or
otherwise prevent the collection of such taxes. Rowlee v.
Commissioner, 80 T.C. at 1123, and cases cited therein.
Petitioner testified that she did not know, until the IRS
investigation began, that embezzlement income was taxable, and at
that point she cooperated fully with respondent. Respondent
points to petitioner's failing to report the embezzlement income,
withholding bank records from tax preparers and respondent, and
refusing to sign an amended return reporting the embezzled funds,
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011