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a doctor whose income was consistently and substantially
understated, the taxpayer’s reliance on his accountant was a
factor in the Court’s holding that the Commissioner failed to
clearly and convincingly prove fraud. Zipp v. Commissioner, T.C.
Memo. 1998-371.
B. Whether There Was a Pattern of Behavior Which Indicates
an Intent To Mislead
Respondent points out that petitioner, in the process of
applying for loans, provided monthly income figures to lenders
that reflected that he knew that he was underreporting his
income. During 1994, petitioner sought a $5,100 personal loan,
and he estimated that his monthly income was $3,200. A few
months later petitioner began the process of purchasing a home,
and in documents submitted to secure a $140,000 mortgage loan, he
estimated that his monthly income was $5,217 on one occasion and
$4,137 on another.
When the home loan was being finalized, the mortgage company
requested copies of petitioner’s 2 prior years’ Federal income
tax returns. Petitioner obtained the copies of the returns from
his father and provided them to the mortgage company. Unlike the
returns filed with respondent, which reported insignificant
amounts of net income from the construction business, the copies
supplied to the mortgage company reflected annual net income in
the low $50,000's. In addition, there were some discrepancies
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