AJF Transportation Consultants, Inc. - Page 27




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             Other badges of fraud include concealing assets, extensive                                           
             dealings in cash, Recklitis v. Commissioner, supra at 910,                                           
             failure to file timely returns, Kotmair v. Commissioner, 86 T.C.                                     
             1253, 1261 (1986), and failure to provide tax return preparers                                       
             with complete and accurate information, Korecky v. Commissioner,                                     
             781 F.2d 1566, 1569 (11th Cir. 1986), affg. T.C. Memo. 1985-63.                                      
                    Ferrentino presented a cash hoard of $122,600 to the Federal                                  
             Reserve Bank in Buffalo, New York.  According to the required                                        
             Currency Transaction Report, $75,000 of the amount presented was                                     
             in bills of $100 or higher.  The record indicates that when                                          
             Ferrentino cashed the Custom Decorating and fuel reimbursement                                       
             checks, Manufacturer's Hanover would generally cash the checks in                                    
             $100 denominations.  During audit, Ferrentino told Revenue Agent                                     
             Oswald: (1) He did not report the cash hoard as income, (2) he                                       
             knew that the source of the cash hoard constituted taxable                                           
             income, and (3) he called the cash hoard pocket monies.  At                                          
             trial, Ferrentino explained that he had accumulated the cash                                         
             hoard over a period of 15 to 18 years.  He further testified that                                    
             the cash hoard resulted from the selling and restoration of                                          
             furniture and that he accumulated the cash hoard in anticipation                                     
             of his divorce.                                                                                      
                    Based on the amount of $100 bills presented to the Federal                                    
             Reserve Bank and the fact that Ferrentino received $100 bills                                        
             when cashing the checks at Manufacturer's Hanover, we may                                            
             justifiably infer that part of Ferrentino's cash hoard was                                           
             attributable to the cashed checks.  We may further infer that                                        

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