- 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 ColaninoPage: Previous 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Next
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