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attempting to conceal illegal activities, (8) failing to make
estimated tax payments, (9) filing false documents, (10) dealing
in cash, and (11) experience and knowledge of tax laws. See
Douge v. Commissioner, 899 F.2d 164, 168 (2d Cir. 1990); Bradford
v. Commissioner, 796 F.2d 303, 307 (9th Cir. 1986), affg. T.C.
Memo. 1984-601; Wheadon v. Commissioner, T.C. Memo. 1992-633.
The record in this case contains evidence of at least four
indications of petitioner’s fraudulent intent.
First, petitioner understated his income tax liability on
his 1984 and 1986 returns as he originally filed them. The Court
of Appeals for the Ninth Circuit, to which an appeal of the
decision in this case would lie, has held that expenditures of a
corporation constitute constructive dividends if: (1) The
expenditures do not give rise to a deduction on behalf of the
corporation, and (2) the expenditures create “economic gain,
benefit, or income to the owner-taxpayer.” P.R. Farms, Inc. v.
Commissioner, 820 F.2d 1084, 1088 (9th Cir. 1987), affg. T.C.
Memo. 1984-549; Meridian Wood Prod. Co. v. United States, 725
F.2d 1183, 1191 (9th Cir. 1984); Palo Alto Town & Country
Village, Inc. v. Commissioner, 565 F.2d 1388, 1391 (9th Cir.
1977), remanding T.C. Memo. 1973-223. INI made payments to
Burke’s estate, which petitioner originally contended were made
in respect of a bonus that INI owed to Burke on the date of his
death. We are unpersuaded. The evidence in the record, contrary
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