- 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
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