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Petitioners’ Sophistication
The sophistication, education, and intelligence of the
taxpayer are relevant to determining fraudulent intent.
Niedringhaus v. Commissioner, 99 T.C. 202, 211 (1992); Stephenson
v. Commissioner, supra at 1006; Iley v. Commissioner, 19 T.C.
631, 635 (1952). There is no evidence suggesting that Vernon or
Janet had any training in accounting, tax planning, or tax return
preparation. They both have a high school education, and Vernon
attended only one semester of junior college.
Petitioners’ Credibility
Respondent repeatedly claims that petitioners’ contentions
are merely supported by their self-serving testimony. We
disagree. Several witnesses corroborated Vernon and Janet’s
testimony. This included establishing: (1) TECO’s bookkeepers
coded TECO’s checks, and when the bookkeepers were uncertain
about how to code a check, they let Mr. Allison code the checks;
(2) TECO checks were paid to Vernon so he could purchase business
items for TECO in cash in order to get better prices; (3) Vernon
conducted TECO business outside the office, including at home and
in a separate structure (home office) located on the same
property as Vernon and Janet’s residence during the years in
issue; (4) trips to Las Vegas, Nevada, were business related; (5)
hunting trips were business related; (6) a country club
membership was used for business related events; (7) a tractor
was used at TECO for business purposes; and (8) Vernon was very
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