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that various other payments for the construction expenses had
been listed on petitioner’s books and corporate tax returns as
corporate expenses. Atkinson’s dealings with petitioner’s
employees, Dunkin, and Ameye demonstrate an intent to mislead.
In addition, Atkinson lied to the IRS agents. When the IRS
agents questioned Atkinson about whether petitioner had
improperly deducted the construction expenses, Atkinson stated
that the construction expenses had not been deducted on
petitioner’s corporate tax returns. Further, Atkinson attempted
to mislead the IRS agents by stating that petitioner had only
paid for part of the construction expenses (the $69,000 payment
for lumber) for which he had repaid petitioner. Also, after
requested, Atkinson failed to provide the IRS with the
construction invoices.
In summary, the evidence shows that Atkinson understated
petitioner’s taxable income, concealed records and maintained
inadequate records, failed to cooperate with tax authorities, and
undertook a pattern of conduct with the intent to mislead Dunkin,
Ameye, and the IRS. Furthermore, Atkinson is a sophisticated
businessman who managed petitioner very successfully, attracting
regional and national recognition.
Petitioner argues that Atkinson was not aware that treating
the construction expenses as cost of goods sold on petitioner’s
corporate tax return, instead of declaring corporate dividends,
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