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evidence of fraud with regard to these items. See Korecky v.
Commissioner, supra at 1568.
When petitioners met with their accountants to review their
tax returns for the years in issue, they did not mention the gas
rebate income even though they were asked whether any items of
income had been omitted.32
Petitioners cashed the rebate checks, deposited them into
their personal bank accounts, or, in one instance, deposited the
check in Towers Construction’s bank account before dividing the
proceeds between Briggs and Mrs. Morris. Petitioners’
explanations of their behavior in this regard were implausible
and inconsistent.
Petitioners kept inadequate records. By Briggs’ own
admission, petitioners were “sorry bookkeepers”. Daniell’s
accountant testified that the records were “appalling”. The
funds of petitioners’ various business entities, and possibly
their personal funds as well, were commingled in something called
an “intercompany” bank account that apparently was in the name of
Briggs.33 Petitioners disregarded corporate formalities in their
32 Briggs testified implausibly that he informed his
accountants of the gas rebate payments “indirectly” by giving
them a copy of a newspaper article concerning the rebate program.
“I gave them a copy of it. And I laughed and joked and said,
Here you go. Look at this.”
33 Briggs testified on direct examination that “I didn’t
have a personal account. My account was commingled with the
(continued...)
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