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suggests that he had little respect for Federal and State tax
requirements. Furthermore, petitioner concealed these cash
payments not only by his failure to file the requisite Federal
and State employment tax returns, but by not claiming such
payments as deductible expenses on Grand Video’s Schedules C.
Petitioner’s willingness to give up what would otherwise be
allowable deductions strongly suggests the existence of
unreported cash income.
After careful consideration, we find that respondent has
satisfied his burden of showing that the underpayment of tax
required to be shown on petitioner’s return for each year in
issue is due to fraud.
Reviewed and adopted as the report of the Small Tax
Division.
To reflect the foregoing,
Decision will be
entered for respondent.
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