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constant was petitioner’s objective to dodge his responsibility
to pay taxes. Based on the foregoing we believe that petitioner
did not have a sincere belief in the reasons he now relies on for
not complying with the law.
Other facts support this conclusion. For example,
petitioner collected a 4-percent general excise tax from his
customers but did not remit the funds so collected to the State
of Hawaii. The fact that petitioner collected taxes and did not
pay them to the State of Hawaii leads us to believe that his
purpose in collecting and retaining these State taxes was to
enhance his financial status. There was no high-minded or
misguided purpose; petitioner just did not want to pay tax.
Petitioner’s conduct regarding his State tax obligations supports
our conclusion that petitioner's failure to file or pay Federal
tax was not motivated by a sincere belief that he was under no
legal obligation to do so. In McGee v. Commissioner, 61 T.C.
249, 260 (1973), affd. 519 F.2d 1121 (5th Cir. 1975), we
observed:
While evidence that a taxpayer was attempting to
defraud another in a business transaction may not be
direct evidence of fraud with intent to evade tax, see
Toledano v. Commissioner, 362 F.2d 243, 247 (C.A. 5,
1966), the Court is entitled to consider such evidence
along with other evidence in determining the intent of
the taxpayer in doing certain acts, because it is a
fair inference that a man who will misappropriate
another's funds to his own use through
misrepresentation and concealment will not hesitate to
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