Reaves Livestock, Inc., et al. - Page 40

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          fictitious persons (Ray Hunt and John Chavis) in 1984, 1985,                
          1986, and 1987.                                                             
               Mr. Reaves opened the S&J account with a Social Security               
          number that was neither his nor Mrs. Reaves'.  Mr. Reaves                   
          speculated that it might have been Prevatte's, but he also said             
          that he did not know.  This is a badge of fraud for Mr. Reaves.             
               This badge of fraud applies to Mr. and Mrs. Reaves for 1984,           
          1985, 1986, and 1987, because they both used fictitious names in            
          each of those years.                                                        
                    e.   Concealing Income from Return Preparers                      
               Concealing income from a taxpayer's return preparer can be             
          evidence of fraud.  Korecky v. Commissioner, 781 F.2d 1566, 1569            
          (11th Cir. 1986), affg. T.C. Memo. 1985-63; Farber v.                       
          Commissioner, 43 T.C. 407, 420 (1965), modified 44 T.C. 408                 
          (1965).  Davis did not know about the First Citizens accounts or            
          John Chavis checks or know that the 282 checks were written to              
          fictitious payees when he filed Mr. and Mrs. Reaves' returns for            
          the years in issue.  Mr. Reaves did not tell Davis about any of             
          these items.  Mrs. Reaves gave Mr. and Mrs. Reaves' personal                
          return information to Davis, but she did not tell Davis about the           
          First Citizens accounts or the John Chavis checks.                          
               Petitioners contend that Davis had access to all of their              
          records and should have taken them into account.  We disagree.              








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