- 8 - under section 7206(1) is certainly one of the facts to be considered in deciding whether the Chens committed tax fraud. See id. at 643-644; see also Welker v. Commissioner, T.C. Memo. 1997-472. And the Chens’ specific acknowledgment of fraud in the plea agreements certainly weighs against their claims of innocence now. But even without the acknowledgment of fraud and the guilty plea, the badges of fraud in this case are plain: ! Mr. Chen intentionally submitted a false claim of loss to Chubb Insurance; ! he concealed receipt of the resulting fraud proceeds from his tax preparer; ! the Chens’ testimony is replete with contradictory claims, ranging from Mr. Chen’s claim to know nothing about the financial aspect of the business--“I really [am] not too much concern[ed] about the finance[s], you know, I [am] just a super-sales[man] only”, while later claiming the opposite--“I am like a dictator in the company;” to saying that he “never touch[ed] the money flow and accounting issues * * * [or paid] too much attention in this issue”, only to testify in answer to the question “[D]id you tell the accountant what to do?”, “Yes”; to Mrs. Chen’s testimony both that she herself deposited the $287,000 into the fake Beam account and that Ms. He did;2 ! implausible explanations--to take one example, Mr. Chen said he intended to split the insurance proceeds with Beam’s owner. Yet Mr. Chen never gave him any money, 2 Such inconsistency cannot be chalked up to bad memory or simple misunderstanding, as the Chens argue. The flip-flops are too numerous to discount, and the Court made sure that transla- tors were available at trial to guarantee that the Chens under- stood the questions being asked.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011