-42-
checks under $10,000 to avoid reporting requirements. See sec.
6050I. Petitioner-wife received cash from the masseuses in
petitioner-husband's absence. Petitioners bought properties with
cashier's checks in both petitioners' names. This badge of fraud
applies to both petitioners for each year in issue.
g. Petitioners' Other Contentions
Petitioners contend that petitioner-wife was too sick and
distraught by her mother's death to have intended to evade taxes
or be liable for fraud in the years in issue. We disagree.
Petitioner-wife clearly participated in supervising the saunas
and in the scheme to skim cash from them in the years in issue.
h. Conclusion
Respondent has shown by clear and convincing evidence that
both petitioners fraudulently intended to underpay tax for each
of the years in issue.
4. Items Attributable to Fraud
Respondent has shown by clear and convincing evidence that
petitioners' entire underpayment of tax for each year in issue
was intentional and due to fraud. Thus, petitioners are liable
for the additions to tax under section 6653(b)(1) and (2) for
1983, 1984, and 1985 and under sections 6653(b)(1)(A) and (B) for
1986 and 1987 with respect to the entire underpayment of tax for
each year.
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