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Moreover, the evidence fails to establish that petitioner’s
alleged aviation fuel expenses–-either those allegedly paid in
cash or those charged to his credit card--were exclusively for
business purposes. Petitioner testified that his aircraft were
never flown for nonbusiness purposes. This testimony is directly
contradicted by petitioner’s prior statements. During the
criminal investigation of petitioner, undercover CID agents
posing as potential clients for Romer & Co. secretly taped
conversations with petitioner. The transcripts from those
conversations, which are part of the record in this case, reveal
that petitioner not only used his aircraft for recreational
purposes, but that he claimed personal expenses incurred on
recreational trips as business expenses. For instance, during an
August 19, 1992, conversation, petitioner discussed with
undercover CID agents, who were using the pseudonyms “Bill
Fraizer” and “Dave Hamilton”, the possibility of their buying his
aircraft and operating it under Cirrus’ charter certificate:
BILL FRAIZER: But, if we –- if we had you * * *
[keep track of our expenses, Cirrus] could send
everything to you, couldn’t they?
* * * * * * *
NICK ROEMER [Romer]: Sure. But then what you
would show on your tax return is you’re an air charter
business, and each of you would do it. And you would
show X amount of income coming in and then all of your
expenses, the maintenance and all of that kind of
stuff. But then beyond that you would deduct any other
fun things you’re doing that otherwise you don’t have a
place to deduct right now.
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