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of fraud. Holland v. United States, 348 U.S. 121, 139 (1954).
Mr. Welker concedes that he consistently underreported income.
Taking into account the record as a whole, this is evidence of
fraud.
3. Failure To Maintain Adequate Books and Records
Failure to maintain adequate books and records may be
indicative of fraud. Truesdell v. Commissioner, 89 T.C. 1280,
1302 (1987); Gajewski v. Commissioner, supra at 200. Mr. Welker
did not keep any records regarding the cash payments he received
from Brockland Pontiac. This is evidence of fraud.
4. Intent To Mislead
Misleading statements to an investigating agent may be
evidence of fraud. See Gajewski v. Commissioner, supra at 200.
Mr. Welker argues that, from the very beginning, he always
believed that the cash payments from Brockland Pontiac were
gifts, and he so informed Ms. Alexander and Mr. Neighbors on June
9, 1989. In his first interview with Ms. Alexander and Mr.
Neighbors on March 29, 1989, however, Mr. Welker stated that he
did not receive any gifts during the years in issue.
Additionally, as part of the criminal tax case, Mr. Welker
admitted that when he prepared his income tax returns for the
years in issue he knew that he should have reported the cash
payments from Brockland Pontiac as income.
If Mr. Welker had truly believed that the cash payments were
gifts, he misled Ms. Alexander and Mr. Neighbors on March 29,
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