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determination nor the record provides clear and convincing
evidence that petitioner omitted the loan proceeds from income
with fraudulent intent. C.B.C. Super Markets, Inc. v.
Commissioner, 54 T.C. 882, 896 (1970).
c. Petitioner’s Testimony in His Criminal Case
Respondent contends that petitioner’s testimony at his
criminal trial that he relied on advice of counsel that the loans
were not income shows that he fraudulently intended to evade tax
because his prior testimony was not credible. Respondent cites
no case in which any court considered testimony in another case
as a badge of fraud in a civil tax case. Petitioner’s testimony
at his criminal trial is not a part of our record. We have
already considered the appropriate role and effect of
petitioner’s criminal conviction on the fraud issue in this case.
Respondent provides no reason or authority for separately
considering petitioner’s testimony at his criminal trial as a
badge of fraud.
d. Conclusion
Respondent has not shown by clear and convincing evidence
that petitioner intended to evade tax for 1985 that he knew he
owed.
E. Whether Petitioner Is Liable for the Addition to Tax for
Substantial Understatement
Petitioner contends that he is not liable for the addition
to tax under section 6661(a) for substantial understatement. In
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