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the receivables for nominal amounts in order to claim false bad
debt deduction losses and offset additional income reported on
his returns and the returns of the conduit entities.
Tenth, as discussed previously, Kanter's testimony at trial
was implausible, unreliable, and sometimes contradictory. We did
not find it credible.
Finally, other factors that support a finding of Kanter's
fraud include, but are not limited to, manipulations of
deductions and income between various corporate, partnership, and
trust entities to conceal not only his income but the income of
others; failure to account for payments for services; and the use
of the various artifices to divert the payments to his children
and trusts benefiting his family.
Kanter's substantial understatements of income over an
11-year period, his intentional misdirection of income, and his
deliberate mischaracterizations of the transactions are clear and
convincing evidence of his fraudulent intent to evade taxes,
particularly in light of his legal education and experience and
overall tax sophistication. See Scallen v. Commissioner, 877
F.2d 1364, 1370-1371 (8th Cir. 1989); Sisson v. Commissioner,
T.C. Memo. 1994-545, affd. without published opinion 108 F.3d 339
(9th Cir. 1996); Wheadon v. Commissioner, T.C. Memo. 1992-633.
The transactions involved here were masquerades, concealing
the true character of the payments. In reality, an attorney and
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