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a conclusion that they structured their dealings in WVI and
Powhatan Associates in such a way as to purposely evade the payment
of taxes. We disagree.
We do not find petitioners to be tax sophisticated. Although
marginally experienced in business matters, neither Dr. nor Mr. Gow
had substantial knowledge or training in tax law. Dr. Gow’s
advanced degrees were in the field of education, not business.
Before the formation of WVI, her experience and training dealt more
in the operational management and planning side of business than
with the accounting or economic side. Several courses in tax do
not make one an expert. Additionally, we draw no inferences
regarding Dr. Gow’s tax sophistication from a letter she wrote to
her personal accountant (Mr. Bielat) regarding her entitlement to
specific deductions.
Although we find petitioners’ testimony self-serving, we do
not necessarily find their testimony untruthful or devious. Nor
are we convinced that petitioners deliberately caused their travel
and entertainment expenses to be hidden in the company’s books in
a way designed to avoid taxes. The fact that Revenue Agent Puchaty
could not find the expenses in the accounts where he expected them
to be does not persuade us that petitioners intentionally “hid
them”.
Respondent cites Grossman v. Commissioner, T.C. Memo. 1996-
452, for the proposition that in circumstances similar to those
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