-12-
Commissioner, 732 F.2d 1459, 1461 (6th Cir. 1984), affg. per
curiam T.C. Memo. 1982-603.
Respondent contends that the following establish fraud: (1)
Mr. Wickersham's sophistication and experience, (2) the context
of the events and a pattern of conduct by Mr. Wickersham, (3) Mr.
Wickersham's lack of credibility, and (4) Mr. Wickersham's
section 7206(1) conviction.
B. Mr. Wickersham's "Sophistication"
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). Contrary to respondent's assertion, however,
the sophistication, education, and intelligence of a taxpayer are
not themselves badges of fraud. These considerations are
relevant to the determination of whether a taxpayer could have
formed the intent necessary to be found liable for the fraud
penalty. See Niedringhaus v. Commissioner, supra at 211;
Stephenson v. Commissioner, supra at 1006; Iley v. Commissioner,
supra at 635.
Mr. Wickersham owns and operates a car dealership and
engages in some real estate ventures/transactions. There is no
evidence suggesting that he had any training in accounting, tax
planning, or tax return preparation. On the basis of these
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