- 22 -
Petitioner instructed Ms. Jilek, who regularly deposited Taxman’s
income into its bank account, not to deposit Taxman’s cash
receipts into Taxman’s bank account. Petitioner also reprimanded
Ms. Jilek when, on occasion, she did deposit the cash. Instead,
petitioner took possession of the cash, and he admits that he
used some of the cash for his own personal expenses. He did not
report the amounts used for personal expenses on his individual
tax returns. Petitioner claims that some of the cash was used
for business expenses, but Ms. Jilek credibly testified that
although she remembers occasionally using cash to buy postage,
she does not remember using cash for any other business expense.
Petitioner did not keep track of how the cash was spent. Ms.
Jilek was responsible for paying Taxman’s bills, signing checks
drawn on Taxman’s account, and using petitioner’s credit cards to
pay business expenses. Respondent has shown that it was unusual
for Taxman to pay its expenses in cash. Even small amounts were
paid by check. Ms. Jilek could not remember petitioner or
herself using cash to pay Taxman’s expenses, except, sometimes,
for postage. We do not find petitioner’s testimony that he used
the cash for business purposes credible, and we believe
petitioner took the cash with the intent to conceal income.
Petitioner understated his income, maintained inadequate
records of amounts he received from Taxman, and concealed income
he received from Taxman. Petitioner is collaterally estopped
Page: Previous 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 NextLast modified: May 25, 2011