S. Robert Davis - Page 36




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          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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