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NSA to divert from TCM to Camaro in 1987. We conclude that
respondent has not clearly and convincingly made that showing.
Petitioner concealed the NSA payments to Camaro from TCM’s
employees. Respondent has not proven by clear and convincing
evidence that petitioner knew TCM was taxable on funds he
arranged for NSA to pay to Camaro, checks from various sources
that TCM diverted to the Double D account, and checks from Midtex
Relays and NSA deposited to petitioner’s personal account or
cashed by petitioner. We are convinced that petitioner knew he
was taxable on those funds but not that he knew that both TCM and
he were taxable on the same funds.
TCM’s conviction under section 7206(1) for filing a false
return for 1988 does not show that TCM committed fraud in 1987.
We do not consider TCM’s conviction under section 7206(1) in
1988, on different facts, as evidence of fraud in 1987. Klein v.
Commissioner, T.C. Memo. 1984-392, affd. 880 F.2d 260 (10th Cir.
1989); Corson v. Commissioner, T.C. Memo. 1965-214, affd. 369
F.2d 367 (3d Cir. 1966).
We conclude that respondent has not shown by clear and
convincing evidence that TCM fraudulently intended to underpay
tax for 1987.
C. Statute of Limitations
The statute of limitations does not bar respondent from
assessing and collecting tax from petitioner for 1987 and 1988
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