- 3 -
C. Conclusion ..................... 35
II. Intent To Evade Taxes ................. 35
A. Badges of Fraud .................. 36
1. Failure To Report Income Over an Extended Period of
Time ..................... 37
2. Failure To File a Tax Return .......... 39
3. Concealment of Bank Accounts From Internal Revenue
Agent, Failure To Furnish the Government With
Access To His Records, and Failure To Cooperate
With Tax Authorities ............. 39
4. Failure To Keep Adequate Books and Records .. 40
5. Dealing in Cash ................ 40
6. Taxpayer’s Experience and Knowledge, Especially
Knowledge of Tax Laws ............ 41
7. Taxpayer's Implausible Explanations of Conduct
Given at Trial ................ 41
8. Participation in Illegal Activities or Concealment
of an Illegal Activity ............ 41
B. Conclusion ..................... 42
Issue 4. Whether Petitioner Mr. Beck Received Constructive
Dividends From Beck's Liquors in 1992 and 1993 in the
Respective Amounts of $151,448 and $117,641 .... 43
I. Ownership of Stock of Beck's Liquors .......... 43
II. Constructive Dividends ................. 45
A. Diverted Corporate Income ............. 46
B. Remaining Expenses ................. 48
MEMORANDUM FINDINGS OF FACT AND OPINION
PARR, Judge: Respondent determined deficiencies and
penalties in petitioners' Federal income taxes for 1991, 1992,
and 1993 as follows:
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