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Sec. 6663(b); Marretta v. Commissioner, T.C. Memo. 2004-128;
Peyton v. Commissioner, T.C. Memo. 2003-146.
a. Omission of Anis Partnership Income in 1995
Petitioner contends that his failure to include in income
for 1995 amounts he received from the Anis partnership was not
due to fraud. We disagree.
Petitioner testified that he gave his interest in the Anis
partnership to his children in 1995 to divest himself of assets
that could be seized to satisfy his potential liability in the
Redlands litigation. Petitioner testified that the $47,443 he
received from his children was a loan. However, no documentary
evidence supports petitioner’s claim. Petitioner’s books for
1995 do not show deposits of loan proceeds in the amount of
$47,443 or during June 1995, when petitioners’ children allegedly
lent him the money. Petitioner does not explain why his children
received $47,443.51 in cash, converted it to cashier’s checks,
and then purportedly lent it to petitioner. We believe
petitioner tried to conceal his receipt of attorney’s fees from
the Anis partnership by diverting them through his children.
Petitioner testified that he did not report the amounts that
petitioners’ children received from the Anis partnership because
Lewellen told him it was not income to him. Petitioner’s claim
is unconvincing in view of Lewellen’s credible testimony that
petitioner did not tell him that petitioner or his children had
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