- 36 -
accountants, Mr. Fenn and Mr. Stimmel, to prepare his tax
returns.
We also do not believe that Mr. Davis' alleged "failure to
cooperate" is the kind of uncooperativeness envisioned as a badge
of fraud. One example of uncooperativeness alleged by respondent
relates to pretrial motion practice and discovery requests. In
this case, we do not believe that asserting privilege, having to
be compelled to comply with discovery requests, and hiring
numerous counsel to represent oneself are badges of fraud.
Furthermore, we do not find Mr. Davis's lack of memory about
certain events to be uncooperative. The transactions in issue
took place between 15 and 25 years ago, and many witnesses had
difficulty remembering events from so long ago. In the instant
case, a lack of memory about the distant past is understandable.
K. Conclusion
After reviewing all of the facts and circumstances, we
conclude that respondent has failed to prove clearly and
convincingly that for 1976, 1984, or 1985 Mr. Davis intended to
evade taxes known to be owing by conduct intended to conceal,
mislead, or otherwise prevent the collection of taxes.
Accordingly, we do not sustain the additions to tax for fraud for
these years.
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