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Bernard and the four checks payable to the contractor for its
$32,940 of services, covered an expense greater than $10,000.8
Under the facts herein, petitioners’ use of the cashier’s checks
does not convince us that they used those checks with the
requisite intent to evade Federal income tax. To be sure, an
individual’s use of cashier’s checks to pay personal expenses
does not necessarily mean that the individual did so to evade the
payment of Federal income tax. Such is especially true here
where petitioners regularly used cashier’s checks to pay personal
expenses during years before the subject years.
Respondent also finds a fraudulent intent on the part of
petitioners in the fact that Nanny’s kept imperfect records and
that Nanny’s did not deposit all of its cash receipts into the
business account. We do not do likewise. Nanny’s is an entity
separate from petitioners, and we do not consider it appropriate
under the facts herein to impute Nanny’s actions to petitioners.
See, e.g., Estate of Feinsmith v. Commissioner, T.C. Memo. 2001-
194. In fact, respondent’s only exception is to the fact that
Nanny’s failed to deposit all of its gross receipts into its
business account, acknowledging explicitly that petitioners did
deposit in their bank accounts all of the income that they
8 We also bear in mind that petitioners, on Sept. 18, 1989,
knowingly subjected themselves to the Bank’s practice of
reporting cash transactions totaling more than $10,000 when they
purchased one of the checks payable to the contractor and made
their cash payment on the third loan.
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