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This Court, however, will not sustain a determination of
fraud based only on circumstances that at most create only the
suspicion of fraudulent intent. Katz v. Commissioner, 90 T.C.
1130, 1144 (1988); Green v. Commissioner, 66 T.C. 538, 550
(1976); Ross Glove Co. v. Commissioner, 60 T.C. 569, 608 (1973).
Petitioner does not dispute the fraud penalties by arguing
here that the CNC payments to her and her late husband were not
income. She disputes, however, any allegation that she knew the
distributions were income at the time she filed her joint returns
for 1991 and 1992. And she alleges that she reported what she
thought was the correct amount of income on her individual return
for 1994. She argues, in fact, that she relied on the advice of
her return preparer in not reporting the CNC distributions as
income. According to petitioner, she thought, for the years at
issue, that she would not have income from CNC until she
recovered her total "investment" in CNC.
Fraud For 1991 and 1992
Mr. Alfano, the preparer of the joint 1991 return, testified
that petitioner brought up the CNC "investment". She mentioned
CNC and showed him a check. She told him where the check came
from and described the investment. He testified that he told
petitioner that CNC was not "a normal type of investment".
Petitioner and Mr. Alfano talked about the taxability of the
CNC distributions. He asked whether the checks she had received
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