Estate of Harvey Feinsmith, Deceased, Betty Feinsmith, Executrix - Page 17




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               Respondent focuses in part on the operations of Randy Hall             
          to deduce that Mr. Feinsmith had the requisite fraudulent intent.           
          We do not do similarly.  The fact that Randy Hall may have been             
          involved in a fraudulent scheme to attempt to evade its Federal             
          income tax obligation, or that Mr. Feinsmith may have                       
          participated in such an attempt, does not necessarily mean that             
          Mr. Feinsmith was involved in a scheme to attempt to evade his              
          Federal income tax obligation as well.  Nor does the fact that              
          Randy Hall may have understated its income for the subject years,           
          or kept inadequate records, impute to Mr. Feinsmith the requisite           
          fraudulent intent to avoid his Federal income tax obligation.               
          The fact that Randy Hall may have participated in an illegal                
          activity (the scheme) and that this activity involved cash also             
          does not establish fraud on the part of Mr. Feinsmith in his                
          individual capacity.                                                        
               When we focus as we should on Mr. Feinsmith’s personal                 
          income tax obligation, we are unconvinced by the record that he             
          filed his 1983 and/or 1984 Federal income return intending to               
          evade that obligation.  We simply cannot find that Mr. Feinsmith            
          was actually involved with the scheme in his individual capacity            
          or that he converted any of the proceeds from the scheme to his             
          personal use.  In fact, when Mr. Feinsmith first became                     
          affiliated with Randy Hall, it had been participating in the                
          scheme for at least 2 years.  We find no reliable evidence in the           






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