- 14 -
supplied by Griffith and that he had no contact with petitioner
during the preparation process. Petitioner testified that her
attorneys advised her not to sign the amended return. Based on
the testimony of petitioner, the tax preparers, and Agent Johnson
himself, we disagree with respondent's assertion that
petitioner's failure to sign the amended return shows her intent
to evade taxes.
Finally, in addressing the other so-called badges of fraud,
we find that Agent Johnson's own testimony exonerates petitioner.
He testified that petitioner never denied receipt of the
embezzled funds, nor did she attempt to conceal the money from
the IRS. She made no false entries on any book or records, she
did not backdate or postdate any documents, she did not maintain
two sets of books, nor did she claim fictitious deductions. She
did not hide any bank accounts, she did not maintain a safe
deposit box or otherwise hoard any funds, nor did she keep
accounts under false names. She did not make any false
statements related to the preparation and examination of her 1984
and 1985 tax returns, nor in any other way did she hinder the
examination of those returns.
In addition, we had an opportunity to closely observe
petitioner's demeanor at trial. She answered questions freely
and without evasion, and we found her testimony credible.
In light of the foregoing, we find that respondent has not
proven by clear and convincing evidence that petitioner engaged
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011