- 19 -
With regard to 1985, 1987, and 1988, petitioner’s conspiracy
conviction constitutes evidence of petitioner's fraudulent
intent. Mobley v. Commissioner, 33 F.3d 1382 (11th Cir. 1994),
affg. without published opinion T.C. Memo. 1993-60.
The cumulative evidence in this case is strong and
persuasive to the effect that, during at least the 4 years in
issue, sales of Cal Ben were knowingly underreported, and
petitioners' taxable income relating thereto was knowingly and
willfully underreported on petitioners' Federal income tax
returns.
Petitioner handled the invoices, payments, and bank deposits
relating to Cal Ben’s unreported sales. Petitioners used
payments from unreported sales of Cal Ben to make personal
investments and to pay personal expenses.
The evidence is clear and convincing that during 1985
through 1988 petitioner intentionally diverted approximately $2
million of unreported sales of Cal Ben into the Lloyds/Sanwa
account. Petitioner intentionally withheld invoices pertaining
to these sales from Cal Ben’s bookkeepers so that the specific
sales would not be recorded in Cal Ben's sales journal and in the
form of partnership income on petitioners' income tax returns.
Barbara Schachter was a bookkeeper for Cal Ben and knew of
the Lloyds/Sanwa account and knew generally that payments from
unreported sales were deposited into that account were not
recorded in Cal Ben's sales journal. Barbara Schachter's claim
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011