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This factor weighs against petitioners.
6. Cooperation With Authorities
Failure to cooperate with authorities is indicative of
fraud. Mr. Ford was less than forthcoming with the SEC, and we
do not find any evidence that petitioners were helpful in
reconstructing the transactions underlying respondent’s notice of
deficiency. We find this factor weighs against petitioners.
7. Conclusion
On the basis of the above analysis, we find that all of the
badges of fraud weigh against both petitioners. We therefore
conclude that petitioners intended to evade tax known or believed
to be owing.
C. Portion of Underpayment Attributable to Fraud
Respondent has proven clearly and convincingly that a
portion of petitioners’ underpayment is attributable to fraud.
Thus, the whole underpayment is attributable to fraud, except to
the extent petitioners prove otherwise. Sec. 6653(b)(2).
Petitioners testified that Mr. Doorn and other unnamed Europeans
owned the money in the Canadian accounts. Mr. Ford allegedly
viewed his role as that of an “agent” for the Europeans, and
testified that his only interest in the Canadian accounts was a
50-percent profit participation once the Europeans’ original
investment was recouped. Thus, he testified, the moneys which
petitioners used from these accounts were “loans” repayable to
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