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Cir. 1993); Hughes v. Commissioner, T.C. Memo. 1994-139 (citing
Rogers v. Commissioner, 111 F.2d 987, 989 (6th Cir. 1940), affg.
38 B.T.A. 16 (1938)). It has been held that discrepancies of 100
percent or more between the correct net income and the reported
net income for 3 successive years provide strong evidence of
fraudulent intent. Hargis v. Godwin, 221 F.2d 486, 490 (8th Cir.
1955); see Rogers v. Commissioner, supra at 989; see also
Williams v. Commissioner, supra; Adams v. Commissioner, T.C.
Memo. 1979-305. Moreover, fraudulent understatement of income
may be established by overstatement of Schedule C expenses.
Drobny v. Commissioner, 86 T.C. 1326, 1349 (1986); see Clark v.
Commissioner, T.C. Memo. 1991-313; see also Buchbinder v.
Commissioner, T.C. Memo. 1986-485.
Petitioners originally reported petitioner’s taxable income
for his 1989, 1990, 1991, 1992, and 1993 taxable years,
respectively as $87,508.67, $77,398.10, $49,747.09, $62,042.31,
and $80,189.01. On their final amended returns for petitioners’
1989, 1990, 1991, 1992, and 1993 taxable years, respectively,
petitioners reported petitioner’s taxable income as $186,846.86,
$197,600.86, $114,947.98, $162,232.18, and $150,708.73.
Petitioners’ returns understated petitioner’s taxable income for
his 1989, 1990, 1991, 1992, and 1993 taxable years, respectively,
by $99,338.19, $120,202.76, $65,200.89, $100,189.87, and
$70,519.72. The discrepancies for the years in issue were 114
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