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as evidence of attempts to conceal. The problem with
respondent’s scenario is that--except for the failure to report
the embezzlement income--it is not supported by the facts.
First, the evidence does not show that petitioner withheld
any information from respondent or refused to cooperate in any
way with respondent.
During the 10 months Agent Johnson spent investigating
petitioner, he never interviewed her in an effort to establish
her state of mind in failing to include the illegal income on her
returns. In fact, Agent Johnson testified that on the only
occasion when he met with petitioner she was pleasant,
cooperative, and willing to review her tax and bank records with
him if her attorney were present. This was perfectly reasonable,
since Agent Johnson was conducting a criminal investigation.
Durand, petitioner's attorney, did in fact speak with the agent
on several occasions about the ongoing investigation and promptly
provided a power of attorney when requested. At trial, Agent
Johnson acknowledged that petitioner cooperated with the
investigation, and that he did not intend in his report to
indicate otherwise. It was Agent Johnson who severed all contact
with petitioner after Durand allegedly gave Agent Johnson the
impression that he, Durand, was "looking for a letter from the
IRS forgiving someone for stealing money from the airlines."
From that point forward, Agent Johnson made no further effort to
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Last modified: May 25, 2011