- 34 -
(8) failure to cooperate with tax authorities, see id. at
307-308.
A corporation can act only through its officers. See
Federbush v. Commissioner, 34 T.C. 740, 749 (1960), affd.
per curiam 325 F.2d 1 (2d Cir. 1963). “Corporate fraud
necessarily depends upon the fraudulent intent of the
corporate officer.” Id. (citing Auerbach Shoe Co. v.
Commissioner, 216 F.2d 693 (1st Cir. 1954), affg. 21 T.C.
191 (1953)). In these cases, the individual petitioners
each own 50 percent of the stock of Crabtree Investments.
They serve as the only two officers of the corporation.
On the basis of the entire record, we think the individual
petitioners exercised sufficient control over the affairs
of Crabtree Investments to justify imputing their actions
to Crabtree Investments. See Auerbach Shoe Co. v.
Commissioner, supra at 697.
As to the fraudulent intent prong of the fraud
analysis, respondent asserts that the following items of
circumstantial evidence indicate fraud: (1) Understatement
of income; (2) inadequate records; (3) implausible
explanations of the unreported income; (4) petitioners’
decision to rebuild the business after the fire destroyed
it; and (5) petitioners’ failure to report a robbery at
gunpoint due to their fear of an IRS audit.
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