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explain how this information would have gotten Bob Brockland in
trouble. Furthermore, Bob Brockland did not consider the cash
payments to Mr. Welker to be gifts from Brockland Pontiac;
instead, he thought they were fees which were a cost of doing
business.
Mr. Welker also implied that he did not need to be wholly
forthright or honest in his meetings with the agents because he
"wasn't on a stand or on trial."
Additionally, a conviction under section 7206(1) may render
a taxpayer's credibility suspect. See Piazza v. Commissioner,
T.C. Memo. 1985-222; see also Fed. R. Evid. 609(a). Mr. Welker
pleaded guilty to, and was found guilty of, willfully filing
false income tax returns in violation of section 7206(1) for 1984
and 1986.
All these facts, when taken together, are evidence of fraud.
6. Filing False Documents (The Criminal Tax
Conviction)
Although not dispositive, Mr. Welker's convictions under
section 7206(1) are probative evidence that he intended to evade
taxes. See Wright v. Commissioner, 84 T.C. 636, 643-644 (1985).
7. Dealing in Cash
The exclusive use of cash when conducting business
transactions, when coupled with a lack of recordkeeping, is
evidence of fraud. McGirl v. Commissioner, T.C. Memo. 1996-313;
see also Nicholas v. Commissioner, 70 T.C. 1057, 1066 (1978)
(dealing extensively in cash increases the relevance of
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