- 41 -
profitable sale of three yachts and real estate worth more than
$5.7 million. He also brought two lawsuits that resulted in
significant monetary settlements to him. In sum, we are not
persuaded that petitioner was experiencing any significant
incapacity during the period that fraud has been alleged. To the
contrary, the record amply demonstrates that petitioner was an
astute businessman. In this context, such a background is
further circumstantial evidence that his underpayment of taxes
was due to fraud.
We conclude that, viewed as a whole, the evidence
establishes that a portion of the underpayment in each year at
issue was attributable to fraud and that petitioner has failed to
show that any portion of the underpayments was not attributable
to fraud. Petitioner’s efforts to provide a nonfraudulent
explanation for his actions are unconvincing. The sheer
magnitude of the overstatements of basis and petitioner’s
inconsistent and implausible explanations of his lack of
substantiation strongly suggest that petitioner was attempting to
avoid paying tax on the gain from the sale of the yachts. While
he claims on brief that the lawsuit proceeds were a return of
23(...continued)
receipts from his charter business of $399,239 in 1995 and
$318,471 in 1996. The total 2-year revenues from these two
enterprises are $3,684,278. Petitioner's 1995 and 1996 receipts
for the Winston Yacht and Country Club, Inc., are not in record
and are not included in this total.
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