- 68 -
(4) Dealings in Cash
Respondent contends that the fact that Frank and Katherine
dealt exclusively in cash is another indicium of fraud.
Petitioners contend that Frank and Katherine always conducted
their transactions in cash because they were illiterate and
because they learned the practice of using cash from their
parents. Respondent maintains, however, that only self-serving
evidence indicates that Frank and Katherine dealt in cash because
of illiteracy. Respondent contends that Frank and Katherine
could have used a checking account system as evidenced by the
facts that they obtained mortgages and loans, had competency in
adding numbers, could keep some records, could sign their names,
and could read and write to some degree.
There is no evidence that Frank and Katherine could not have
used banks to deposit receipts and pay expenditures. Nor do
petitioners explain why Sylvia did not maintain a checking
account system for Frank and Katherine while she lived with them.
Frank and Katherine made numerous and substantial cash
expenditures for real property and luxury automobiles. We agree
with respondent that their extensive use of cash for those types
of expenditures supports a reasonable inference that Frank and
Katherine knowingly and willfully attempted to conceal taxable
income.
Page: Previous 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 NextLast modified: May 25, 2011