- 20 - respondent has met this burden. For 1990, petitioner conceded at trial that he understated his income by $950. For 1992, petitioner conceded that he improperly deducted reimbursed medical expenses of $18,129. In addition, for each of the years at issue, Taxman received $3,000 in cash receipts, and petitioner took possession of the cash. The parties stipulated that the $3,000 of cash taken by petitioner each year was not deposited into Taxman’s bank account. Petitioner admits that he controlled all of the cash and that he used some of it to pay personal expenses. He did not keep track of how the cash was spent, and he did not report the cash on his personal income tax returns. Petitioner also admits that he used Taxman funds to pay for furniture. Although petitioner asserts that some of the amounts Taxman spent on his personal expenses were intended to be loans from Taxman, respondent has shown that petitioner did not keep credible records of some of these purported loans. Respondent has also shown that petitioner received income from the sale of his crop hail insurance business in 1990 that he did not report on his return. We therefore conclude that respondent has presented clear and convincing evidence that petitioner underpaid his tax for 1990, 1991, 1992, and 1993. B. Fraudulent Intent Because direct evidence of fraud is rarely available, fraud may be proved by circumstantial evidence and reasonablePage: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Next
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