- 7 - prevent the collection of taxes. See Parks v. Commissioner, 94 T.C. 654, 660-661 (1990). The existence of fraud is a question of fact to be resolved upon consideration of the entire record. See DiLeo v. Commissioner, 96 T.C. 858, 874 (1991), affd. 959 F.2d 16 (2d Cir. 1992). Fraud is never presumed and must be established by independent evidence of fraudulent intent. See Edelson v. Commissioner, supra. Fraud may be shown by circumstantial evidence because direct evidence of the taxpayer’s fraudulent intent is seldom available. See Gajewski v. Commissioner, 67 T.C. 181, 199 (1976), affd. without published opinion 578 F.2d 1383 (8th Cir. 1978). The taxpayer’s entire course of conduct may establish the requisite fraudulent intent. See Stone v. Commissioner, 56 T.C. 213, 223-224 (1971). In determining whether a corporation has acted fraudulently, the Court must consider the fraudulent intent of the corporation’s officers. See DiLeo v. Commissioner, supra at 874. The fraud of a sole or dominant shareholder can be attributed to the corporation. See Benes v. Commissioner, 42 T.C. 358, 383 (1964), affd. 355 F.2d 929 (6th Cir. 1966). “A corporation can act only through the individuals who are its officers or employees.” Kahrahb Restaurant, Inc. v. Commissioner, T.C. Memo. 1992-263. Thus, we must consider the fraudulent intent throughPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011