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The account opened at Fortune Federal in 1982 with one
incorrect digit in the Social Security number is just as likely
to have been a typographical error as intentional. However,
during 1983, petitioners opened the Indian Rocks account under
the Social Security number ending with -3540. The repositioning
of all of the last four digits of the Social Security number
cannot be ascribed to typographical error, especially since Mrs.
Miravalle's personal account at Flagship Bank had the same
erroneous Social Security number. During 1983, petitioners
withdrew funds from the Park Bank account, deposited them into
their personal accounts, and after July 21, 1983, transferred
funds to the Indian Rocks account. Petitioners then used the
Indian Rocks account as their primary business account instead of
the Park Bank account. Petitioners' use of the Indian Rocks
account is a clear indication of petitioners' intent to conceal
their business income.
Finally, we note that petitioners were convicted under 18
U.S.C. 371 (1994) of conspiracy commencing in 1983 to defraud the
United States by evading the tax due from them in violation of
section 7201. This constitutes evidence of fraud for 1983.
Based on the foregoing facts and the record as a whole, we
find that respondent has established that some portion of the
underpayment for 1983 was due to fraud. For 1982, while
petitioners failed to file a return, we find insufficient
evidence of other badges of fraud. Therefore, petitioners are
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