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Mr. Strong consistently understated his income while
spending SCC’s construction income on his personal expenses
during the years in issue. During these same years, Mr. Strong
reported minimal taxable income, if any, and at most $81,640 in
gross receipts from the construction business. Mr. Strong’s
personal tax returns also do not take into account any of the
funds he used for personal expenses.
Mr. Strong did not keep adequate records of the expenses he
claims were related to SCC’s business. His claim of a cash hoard
that he periodically deposited into account No. 893315300 was an
implausible explanation of the unreported construction income.
His purported explanation, if true, is an admission that he
defrauded his creditors and lied to his attorney during his
bankruptcy proceedings by denying the existence of the cash he
claims was hidden under his house. During an inquiry by
respondent’s revenue agent, Mr. Strong refused to provide the
revenue agent with any personal or financial information and lied
about his access to records. During the later audit, he provided
detailed financial records only after respondent obtained third
party records by summons. Mr. Strong knowingly filed false tax
returns for each year at issue. His patterns of depositing cash
in amounts less than $10,000 and understating the construction
income in each year show that he intended to conceal the income
he appropriated from his construction business. We did not find
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