Franklin W. Briggs - Page 48




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         established how this evidence pertains to petitioners.                       
         Apparently, respondent would have us infer that the advice itself            
         was in some manner fraudulent and that petitioners played a role             
         in it.  The record does not clearly support any such inference.              
         The advice that ACT’s accountants provided Daniell is consistent             
         with spreadsheets in evidence, apparently prepared by ACT’s                  
         accountants, which allocated the ACT proceeds partly to loan                 
         repayments and partly to other sources, consistent with the                  
         manner in which petitioners reported them on their individual tax            
         returns.  Without more, it is impossible to know whether ACT’s               
         accountants were negligent in doing their work and in giving                 
         advice to Daniell’s accountant (and presumably to petitioners).              
         There is no evidence to indicate fraud on the part of ACT’s                  
         accountants.                                                                 
              In Association Cable TV, Inc. v. Commissioner, T.C. Memo.               
         1995-596, we held that ACT acted with fraudulent intent in                   
         representing falsely to the Internal Revenue Service that it had             
         adopted a formal plan of liquidation under section 337, attaching            
         false minutes to its return and treating the sale of its assets              
         as nontaxable on its Federal corporate income tax return.                    
         Whatever inferences we might draw from ACT’s fraudulent                      
         intentions in this regard, we conclude that respondent has failed            
         to meet his burden of proving by clear and convincing evidence               
         that petitioners acted with fraudulent intent in underreporting              






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