Gerald A. Sadler - Page 10




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          v. Commissioner, 79 T.C. 995, 1006 (1982), affd. 748 F.2d 331               
          (6th Cir. 1984).  A taxpayer's entire course of conduct can be              
          indicative of fraud.  See Stone v. Commissioner, 56 T.C. 213,               
          223-224 (1971); Otsuki v. Commissioner, 53 T.C. 96, 105-106                 
          (1969).  The sophistication, education, and intelligence of the             
          taxpayer are relevant to determining fraudulent intent.  See                
          Niedringhaus v. Commissioner, 99 T.C. 202, 211 (1992); Stephenson           
          v. Commissioner, supra at 1006; Iley v. Commissioner, 19 T.C.               
          631, 635 (1952).                                                            
               Petitioner is a tax attorney who engaged in a fraudulent               
          refund scheme in order to generate money for his financially                
          strapped businesses.  During the years in issue, payroll checks             
          issued to employees of petitioner's corporations contained                  
          notations showing the amount of tax withheld from each check.               
          Payroll checks issued to petitioner contained no notations                  
          regarding taxes being withheld.  During the years in issue,                 
          petitioner did not segregate any amounts he allegedly withheld as           
          taxes from his payroll checks.  When questioned by respondent as            
          to what he did with the funds he allegedly withheld from his own            
          paychecks, petitioner replied "Spent them."                                 
               At trial, petitioner admitted that the withholding amounts             
          on the Forms W-2 he prepared were "fictitious" because neither he           
          nor his corporations deposited any of the Federal income taxes he           
          claims he/his corporations withheld on the wages he earned.  We             
          conclude that petitioner knew that the amounts he listed as                 




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