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First Citizens checks that were income to them. This badge of
fraud applies to Mr. and Mrs. Reaves for 1984, 1985, 1986, and
1987, because they both did not maintain accurate records in each
of those years.
c. Dealing in Cash to Conceal Income
A taxpayer's use of cash to conceal income is evidence of
fraud. Bradford v. Commissioner, supra. Mr. Reaves used the 282
checks to obtain cash which was concealed income. Mrs. Reaves
used the John Chavis checks to obtain cash which was concealed
income. This badge of fraud applies to Mr. and Mrs. Reaves for
1984, 1985, 1986, and 1987, because they used cash to conceal
income in each of those years.
d. Using a Fictitious Name
Using a fictitious name may be evidence of fraud. Lipsitz
v. Commissioner, 21 T.C. 917, 937 (1954), affd. 220 F.2d 871 (4th
Cir. 1955).
The 282 checks were written to fictitious payees. Mr.
Reaves endorsed one of the checks in 1986. His endorsement of
that check is a badge of fraud for him for 1986.
Mrs. Reaves signed some of the 282 checks for Reaves
Livestock in 1984, 1985, 1986, and 1987, and endorsed some of
them in 1985 and 1986. She also cashed checks written to
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