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A. Underpayment of Tax
Petitioner did not report or pay income tax on the
$1,149,048 of income received as a dividend from BBL in 1996.
She does not contest this, instead arguing that the money was in
fact stolen by Beaudry and that she therefore should not have to
pay tax on it. This argument is not supported by credible
evidence in the record. We are clearly convinced on the record
before us that petitioner was the only actual shareholder of BBL
and that she caused the $1,149,048 to be transferred in 1996 from
BBL to her personal accounts. We conclude that petitioner
received those funds as a dividend from BBL in 1996 and that her
failure to pay taxes on that dividend resulted in an underpayment
of her 1996 Federal income tax.
B. Intent To Evade Tax
Fraud requires a clear and convincing showing that the
taxpayer intended to evade a tax known or believed to be owing by
conduct intended to conceal, mislead, or otherwise prevent the
collection of tax. Stoltzfus v. United States, 398 F.2d 1002,
1004 (3d Cir. 1968). This intent may be proven by circumstantial
evidence because direct proof of a taxpayer’s intent is rarely
available. Reasonable inferences may be drawn from the relevant
facts. See Spies v. United States, 317 U.S. 492, 499 (1943);
Stephenson v. Commissioner, 79 T.C. 995 (1982), affd. 748 F.2d
331 (6th Cir. 1984).
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