- 25 -
about events during the years in issue; (d) failure to cooperate
with tax authorities; and (e) having false or inadequate books
and records.
a. Creating a False Document
Submitting an altered document to the Commissioner’s agents
to obtain tax benefits is a badge of fraud. Powell v. Granquist,
252 F.2d 56, 59 (9th Cir. 1958); Bagby v. Commissioner, 102 T.C.
596, 608-609 (1994); see Spies v. United States, 317 U.S. 492,
499 (1943); Stephenson v. Commissioner, 79 T.C. 995, 1007 (1982),
affd. 748 F.2d 331 (6th Cir. 1984). Each party accuses the other
of altering the letter from Special Friends and testifying
falsely about it.
We decide whether a witness is credible on the basis of
objective facts, the reasonableness of the testimony, and the
demeanor and consistency of statements made by the witness.
Quock Ting v. United States, 140 U.S. 417, 420-421 (1891); Wood
v. Commissioner, 338 F.2d 602, 605 (9th Cir. 1964), affg. 41 T.C.
593 (1964); Pinder v. United States, 330 F.2d 119, 124-125 (5th
Cir. 1964); Concord Consumers Hous. Coop. v. Commissioner, 89
T.C. 105, 124 n.21 (1987).
Petitioner testified and contends that he received a letter
from Special Friends that acknowledged his purchase of an
advertisement for $7,500. We disagree. First, petitioner’s
testimony was contradicted by the credible testimony of Colanino
Page: Previous 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 NextLast modified: May 25, 2011