- 48 -
petitioner failed to report any of these earnings or maintain
adequate books and records for this business.
(5) Petitioner owned and operated for income and investment
at least 12 parcels of real property. Although petitioner
apparently did report much of the income he received from these
properties, he failed to report all the income. When questioned
about this failure, petitioner explained: “I just don’t really
have an explanation.” However, petitioner did claim expense
deductions for these properties. Again, petitioner failed to
maintain adequate books and records for this significant business
endeavor.
(6) During the relevant period, petitioner dealt in
significant sums of cash or its equivalent for which he has no
explanation. For example, during 1990, petitioner wrote four
checks made payable to cash for the total sum of $37,834. At
trial, petitioner could not recall the purpose for, or use of,
these funds. Likewise, petitioner deposited large sums of cash
and its equivalent into his bank accounts. We infer significant
dealings in cash without a definite explanation as an indicia of
fraud. See Parks v. Commissioner, 94 T.C. 654 (1990).
(7) Petitioner failed to inform his accountants (and his
bookkeeper) of Newark T&B and his racing business. Both of these
businesses earned income for the years at issue, none of which
was reported.
Page: Previous 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 NextLast modified: May 25, 2011