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Federal income tax returns for 1992 and 1993. We review this
record further to consider whether the underpayments of tax by
Mr. Coyle are due to fraud within the meaning of section 6663.
When asked at trial how he kept his records on sales of
wheels and axles, Mr. Coyle responded as follows:
Q So you get the cash. Are you – you’re not
recording it anywhere or booking it anywhere?
A Yes. I would keep my records, you know,
basically, you know, to justify my income. Yes.
Q And what kind of records would you keep?
A I’d basically make notations, you know, on a
monthly basis and then accumulate it at the end of the
year and then give it to Herman for my income.
Q So –
A Which, you know, is not the best way in the world
to do it, you know. But, you know, that’s the way I
was doing it.
Q You would book each receipt of cash from wheel
and axle income -
A Right.
Q – to your own records, not the records of Regal?
A Right.
Q To your own records?
A Yes. Because I was getting the benefit of it at
that particular time.
Q And where are those records?
A I don’t know now.
Mr. Coyle did not provide Mr. Herman with information or receipts
reflecting income from sales of wheels and axles.
Testimony from Mr. Roach, Mrs. Roach, and Mr. Gibson lead us
to the conclusion that it was the practice of their respective
businesses not only to keep records for themselves of cash
purchases of wheels and axles from Regal, but also to provide
Regal or Mr. Coyle with copies of the receipts. As stated
previously, we found Mr. Roach, Mrs. Roach, and Mr. Gibson to be
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