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1993 and 1994, Ms. Witt relied on the information provided by
petitioners to prepare those returns.
The sophistication, education, and intelligence of the
taxpayer are relevant considerations in determining whether a
taxpayer has fraudulent intent. See Niedringhaus v.
Commissioner, 99 T.C. 202, 211 (1992); Stephenson v.
Commissioner, 79 T.C. 995, 1005-1006 (1982), affd. 748 F.2d
331(6th Cir. 1984); Iley v. Commissioner, 19 T.C. 631, 635
(1952). Petitioner was a bank trust officer with a background in
accounting. As a bank trust officer with a degree in business
administration as well as extensive training in accounting,
petitioner was "not a person who could fail to understand what
the law requires for him under the circumstances." Halle v.
Commissioner, 7 T.C. 245, 250 (1946), affd. 175 F.2d 500 (2d Cir.
1949). Given petitioner's education and work experience, "it
asks too much" for the Court to "believe that petitioner had no
idea his embezzlement income was taxable." Myers v.
Commissioner, T.C. Memo. 1980-262 (bank trust officer must have
known embezzled funds were taxable income). Petitioner had the
sophistication to know that he was required to report the funds
he received from Mrs. Millyard on his return.
Petitioner's criminal convictions raise a strong inference
that petitioner possessed the willfulness necessary to satisfy
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