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commission. Thus, it is obvious that petitioner’s expenses could
not have been equal to its income because petitioner was earning
a profit due to the markups and the brokerage commission.
Additionally, petitioner was unable or unwilling to provide Mr.
Jackson with the ledgers or any documentation of petitioner’s
actual expenses, and Mr. Jackson never reviewed any books,
records, or documents of petitioner. Instead, Mr. Golden orally
reported to the preparer the gross receipts and expenses of
petitioner.
During the 1993, 1994, and 1995 tax years, petitioner
reported taxable income of $0. Yet, between 1993 and 1995, Mr.
Golden was able to personally draw cash totaling more than
$650,000 from petitioner’s account. It strains credibility that
Mr. Golden thought he could withdraw this sum of money from
petitioner, yet honestly believe that petitioner had no taxable
income during these years.
Petitioner argues that Mr. Golden’s lack of education and
accounting knowledge exculpate him from fraudulent intent. A
limited education is not, in and of itself, enough to shield a
taxpayer from the fraud penalty. See Estate of Temple v.
Commissioner, 67 T.C. 143 (1976) (a taxpayer’s ignorance and
limited education did not shield him from the fraud penalty).
The record indicates that while Mr. Golden did not have a college
education or an accounting background, his control over
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