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indicate the presence of fraud.
Stipulations Related to the Badges of Fraud
The parties stipulated facts that expressly state or support
the conclusion that most of the traditional badges of fraud do
not exist in these cases. These stipulations included that
petitioners did not: Maintain inadequate records, make
implausible or inconsistent explanations, conceal assets, fail to
cooperate with tax authorities, engage in illegal activities,
intend to mislead, fail to file tax returns, or deal in cash.
The trial testimony further leads us to conclude that none of the
aforementioned badges of fraud are present in this case.
1. Profit Sharing Plan
Respondent claims that petitioners’ transactions with TECO’s
profit sharing plan were fraudulent. RA Craddock had a B.B.A. in
general business and accounting and an M.B.A. Even with his
experience as an auditor, his advanced degrees, and far more tax
expertise than petitioners, he needed help from an expert on
profit sharing plans about various highly technical issues
regarding TECO’s profit sharing plan. Vernon and Janet had no
tax background or expertise. We do not believe that they had a
level of tax knowledge or sophistication such that they intended
or attempted to evade taxes via the profit sharing plan.
2. Alleged Misleading of RA Craddock
Respondent claims that Vernon misled RA Craddock by
providing RA Craddock with false or incomplete information. We
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