Ray E. Mason - Page 9

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          file if they could pay the tax owing.  Respondent contends, and             
          we are persuaded, that petitioner’s failure to file an income tax           
          return for 1995 is evidence of fraud.                                       
               Consistent failure to report substantial amounts of income             
          over a number of years is, standing alone, highly persuasive                
          evidence of fraudulent intent.  See Kurnick v. Commissioner, 232            
          F.2d 678 (6th Cir. 1956), affg. T.C. Memo. 1955-31; Temple v.               
          Commissioner, T.C. Memo. 2000-337, affd. 62 Fed. Appx. 605 (6th             
          Cir. 2003).  Here, when the Masons’ income tax returns for 1993,            
          1994, and 1995 were eventually filed, they reported adjusted                
          gross income of $107,336, $148,221, and $97,064 respectively.               
          Respondent argues, and we agree, that this failure to report such           
          substantial income is evidence of fraud.                                    
               Concealing assets or income is also an indicium of fraud.              
          Douge v. Commissioner, supra; Bradford v. Commissioner, 796 F.2d            
          303 (9th Cir. 1986); Recklitis v. Commissioner, supra at 910.               
          Respondent contends, and we agree, that petitioner took                     
          affirmative steps to conceal his income and assets.  Petitioner             
          had no bank account in his name.  He used bank accounts solely in           
          his wife’s name or in the name of El Dorado.  He also transferred           
          all of his various business interests and his residence to                  
          various trusts to conceal his assets and frustrate respondent’s             
          collection efforts.                                                         








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