- 28 -28
Ferrentino hoarded the cash to conceal income from his wife,
Carol Ferrentino, in order to avoid meeting the obligations
enumerated in the Separation Agreement. It is therefore fair to
apply to Ferrentino and his devious course of conduct what we
said in a prior case; namely, "that a man who will misappropriate
another's funds to his own use through * * * concealment will not
hesitate to * * * conceal his receipt of those same funds from
the Government with intent to evade tax." McGee v. Commissioner,
61 T.C. 249, 260 (1973), affd. 519 F.2d 1121 (5th Cir. 1975).
Ferrentino's extensive use of cash is a further badge of
fraud because it indicates a desire to avoid detection of income-
producing activities. Bradford v. Commissioner, T.C. Memo. 1984-
601, affd. 796 F.2d 303 (9th Cir. 1986). Petitioners have not
presented credible evidence of cash payments to casual labor.
Furthermore, Ferrentino did not disclose during audit that the
delivery service and fuel reimbursement checks were issued and
cashed. Instead, respondent became aware of Ferrentino's
dealings only through contacts with J.C. Penney and Wittlin,
Ferrentino's accountant at the time. The circumstances here
suggest that Ferrentino was attempting to conceal income.
Ferrentino pleaded guilty to violating section 7206(1) for
the taxable year 1988. Section 7206(1) makes it a crime for a
taxpayer to willfully make and submit any return verified by a
written declaration that it is made under the penalties of
perjury which he does not believe to be true and correct as to
every material matter. Wright v. Commissioner, 84 T.C. 636, 639
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