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Petitioner submitted to banks and other businesses and
governmental entities false copies of his income tax returns and
false financial and other information.
For 1988, petitioner reported gross receipts of $189,788,
disregarding a Form 1099 from 2618 Inc reflecting nonemployee
compensation to petitioner of $281,176.
We are not persuaded by petitioner's arguments that he
innocently and inattentively bungled his tax affairs. In light of
the evidence, we view petitioner's assertions of ignorance and
unsophistication as simply another attempt by petitioner to obscure
the facts.
For 1987 and 1988, we conclude that the increases to
petitioner's taxable income that we have sustained herein (relating
to bank deposits, disputed checks not deposited into petitioner's
bank accounts, cash withdrawals from the Club, and deductions that we
have not allowed) are attributable to fraud.
For 1988, we note that the increase to petitioner's taxable
income relating to petitioner's receipt of the stock of 2618 Inc is
also attributable to fraud. We view petitioner's failure to report
any amount as income in connection with his receipt of the stock as
part of petitioner's fraudulent conduct. We recognize the
difficulties in valuing the stock. Our valuation, however, is
supported by petitioner's representations as to the value of 2618 Inc
and by the outstanding legal fees in excess of $500,000 for which the
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