Richard and Brenda Nelon - Page 11

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          did not misrepresent, secrete, or attempt to deceive.  Although             
          we do not approve of petitioner's reasons for failing to file               
          returns and failing to submit to respondent's examination, those            
          events, on this record, do not satisfy respondent's burden to               
          clearly and convincingly prove fraud.                                       
               On this record, we do not find that petitioner's                       
          underpayment was due to an intent to evade taxes known to be due            
          and owing by conduct intended to conceal, mislead, or otherwise             
          prevent the collection of taxes.  Stoltzfus v. United States,               
          supra at 1004; Rowlee v. Commissioner, supra at 1123; Acker v.              
          Commissioner, supra at 112.                                                 
               Respondent places great emphasis on the fact that                      
          petitioner had an accountant for the 1985 taxable year,                     
          contending that this reflects a history of filing timely tax                
          returns, and thus petitioner knew of the filing requirements.               
          Petitioner, however, did not set out to evade tax he thought to             
          be due.  Instead, he came to believe that he was not obligated to           
          file a Federal tax return and that he had no obligation to pay              
          Federal tax.  On this record, we find that his belief was not an            
          intentional attempt to fraudulently evade the payment of tax.               
               Respondent also argues that petitioner attempted to conceal            
          assets by dealing in cash.  Petitioner's resolve to close his               
          bank account and, therefore, use cash was not coupled with his              







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