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Petitioner's failure to file her returns for the years 1987,
1988, 1989, and 1990, establishes a 4-year pattern of substantial
and consistent understatements of income.
Petitioner's explanations for her failure to file tax
returns and provide her accountants with complete and accurate
information are contradicted by the record. Petitioner asserts
that her failure to file was caused by the subpoena issued to her
in the collection action against Mr. Freidus which interrupted
the process of gathering information to submit her returns.
Therefore, petitioner maintains that her ultimate failure to file
was caused by the disruption attendant to the collection action
and not by an intent to defraud the government.
We disagree. The record indicates that petitioner began
producing documents in response to the subpoena on February 23,
1990. Since her 1987 and 1988 returns were due prior to this
date, the subpoena could not have caused a disruption in
preparation of these tax returns. Furthermore, the parties have
stipulated that at no time was petitioner denied access to her
records and that petitioner had custody of all original
documents. Therefore, petitioner's failure to file her tax
returns cannot be attributed to the collection action against Mr.
Freidus. Petitioner's implausible explanation is a badge of
fraud.
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