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The inadequacy of the records was not due to negligence on
the part of petitioners, but fraud. Petitioners' reliance on
Tabbi v. Commissioner, T.C. Memo. 1995-463, is misplaced. In
that case, the Court held that the taxpayer was not liable for
the civil fraud penalty, in part because his failure to keep
books and records, other than checks, was due to the fact that he
was "disorganized and because he could not afford accountants."
Id. Other factors also weighed in his favor. In the instant
case, petitioners present only their self-serving testimony that
they were disorganized, which we do not find credible.
Petitioners were able to prove every expense they had claimed for
Sand Hill. They also had ready access to monthly bank statements
and the ability to use them, which petitioner showed in
conducting his deposits analysis. Even more telling, petitioners
could afford and did use an accountant but intentionally failed
to provide him with accurate records. See Korecky v.
Commissioner, 781 F.2d 1566, 1568-1569 (11th Cir. 1986), affg.
T.C. Memo. 1985-63; Merritt v. Commissioner, 301 F.2d 484, 486-
487 (5th Cir. 1962), affg. T.C. Memo. 1959-172.
3. Implausible or Inconsistent Explanations of Behavior
Petitioners refused to acknowledge their receipt of the
$840,000 from Sanrio until after respondent's answer, even though
petitioner earlier had mentioned a potential problem with the
gross receipts reported on the return, and despite the fact that
the $840,000 was specifically brought up in their conversation
with Clement on August 1, 1994. Petitioner subsequently stated
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