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Petitioners’ fraud is their own omissions to report on their own
tax returns their own receipts of the hourly compensation that
the CIPAA Casino paid to them. Thus, their not being “involved
with the managerial operations of the casino” is not a relevant
defense to the civil tax fraud with which petitioners are
charged.
In our analysis of underpayment (supra part II. A.) we
concluded that respondent proved by clear and convincing evidence
that petitioners failed to report what clearly was tip income
(i.e., petitioners’ shares of the patrons’ tips) that was
gathered, apportioned, and periodically paid to them in 1991.
The foregoing evaluation of petitioners’ fraudulent intentions as
to hourly compensation applies with even greater force to the
1991 tip income.
We conclude, and we have found, that respondent has shown by
clear and convincing evidence that the underpayments of tax that
result from petitioners’ failure to report (a) their hourly
compensation paid to each of them by the CIPAA Casino in 1991 and
1992, and (b) their shares of the patrons’ tips that the CIPAA
Casino gathered, apportioned, and periodically paid to
petitioners in 1991, all are due to the fraud of each petitioner.
We so hold.
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