Kevin J. Morse - Page 11

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          Federal income tax returns under section 7206(1) is highly                  
          persuasive evidence that the taxpayer intended to evade tax.                
          Stefansson v. Commissioner, T.C. Memo. 1994-162; Avery v.                   
          Commissioner, T.C. Memo. 1993-344; Miller v. Commissioner, T.C.             
          Memo. 1989-461.                                                             
               In First Trust & Sav. Bank v. United States, 206 F.2d 97,              
          100 (8th Cir. 1953), the U.S. Court of Appeals for the Eighth               
          Circuit, the court to which an appeal in this case would lie,               
          cited with approval United States v. Croessant, 178 F.2d 96, 97             
          (3d Cir. 1949), wherein the U.S. Court of Appeals for the Third             
          Circuit stated:                                                             
               the man who files a wilfully false return has                          
               endeavored to mislead his government.  He creates the                  
               appearance of having complied with the law, whereas his                
               neighbor who has filed no return does no such thing.                   
               Not only has he created the appearance of complying,                   
               but that apparent compliance stands a good chance of                   
               remaining unattacked, for the tax authorities cannot                   
               possibly audit every taxpayer’s return every year. * *                 
               * The law has always distinguished between failing to                  
               disclose useful information and making a disclosure                    
               which is a lie.                                                        
               Petitioner’s intentional filing of a false tax return each             
          year from 1991 to 1994, reporting amounts of income which he knew           
          to be false, is a strong indicium of fraudulent intent with                 
          respect to those years.  Klassie v. United States, supra at 102.            
          Absent some credible evidence that knowingly filing a false                 
          return should not be considered indicative of fraud, a section              
          7206(1) conviction is highly persuasive of fraud.  Id. at 101;              






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