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respondent to issue the notice of deficiency dated June 27, 1994.
On September 23, 1994, petitioner filed a timely petition
with the Court. A trial was held on December 5 and 23, 2002.
This Court established a posttrial briefing schedule that
required respondent to file an opening brief on or before March
10, 2003, and required petitioner to file an answering brief on
or before May 22, 2003. Only respondent filed the required
posttrial brief.
OPINION
Respondent contends that from 1982 through 1987 petitioner
failed to report income he received from the sale of tax shelters
and insurance. In addition, respondent alleges that the entire
underpayment for all 6 years is attributable to fraud.
Petitioner contends that respondent’s determinations for all
years at issue are incorrect and denies that he committed fraud.
I. Income Tax Deficiencies
A. Unreported Income
Gross income is defined as “all income from whatever source
derived” and includes gross income derived from business
(Schedule C taxable income). Sec. 61(a)(2). Section 6001
requires a taxpayer to maintain books of account or records
sufficient to establish his gross income, deductions, and
credits. Sec. 1.6001-1(a), Income Tax Regs.; see also Estate of
Mason v. Commissioner, 64 T.C. 651, 656 (1975), affd. 566 F.2d 2
(6th Cir. 1977). When a taxpayer fails to keep adequate records,
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