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Schedules K-1, Shareholder’s Share of Income, Credits,
Deductions, etc., for 1998 and 1999.
Petitioner’s failure to report the various items of income
that he received during the years in issue, his use of sham
trusts to conceal income, his failure to cooperate in determining
his tax liability, his submission of correspondence to the IRS
espousing frivolous tax-avoidance arguments, and his 4-year
pattern of failing to file Federal income tax returns were all
done with the intent to evade tax.
Discussion
Petitioner never moved to set aside the matters deemed
admitted as a result of his failure to file a reply even when
reminded to do so under Rule 37. He has not contradicted in any
way the material facts set forth in the answer, upon which
respondent relies in support of the determination that
petitioner’s failure to file was due to fraud. He did not file
an affidavit in opposition to the motion for summary judgment.
However, petitioner was permitted to testify. See Rule 121(b),
(d). He denied that he intended to defraud the United States and
testified:
I relied on the advice of David Simmons, Joseph Sweet,
David Swanson, amongst others, that, you know, as far
as not filing was okay. I’ve seen what they’ve done,
you know, over the years for the last seven, eight
years, promoting and telling people not to do this, and
they’re out there doing it.
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Last modified: May 25, 2011