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financial institutions are required to report to the Government
and documented (or failed to document) their use of the cash in
such a way that not even petitioner could verify where the money
went.
Petitioners had on hand nearly half a million dollars in
cash in their personal safe at home and in their safety deposit
boxes when criminal investigators from the IRS first interviewed
them. Petitioner’s statements to the criminal investigators at
his first meeting with them regarding his purpose in hoarding
cash differed from those statements made at his second meeting
with them.
Although petitioner’s conviction for subscribing false
Federal tax returns does not collaterally estop him from denying
that he fraudulently understated petitioners’ income tax
liability, his conviction is evidence of fraudulent intent. See
Wright v. Commissioner, 84 T.C. 636, 643-644 (1985).
Petitioners assert that any inaccuracies in their reported
tax liabilities for the relevant years are attributable primarily
to miscommunication between them and their return preparers and
accountants, Susan Pereira and Steven J. Plotnik. Petitioners
claim that their accountants should have caught several of the
checks that were for personal expenses by looking at records,
some of which were made available to the accountants, outside of
the bank statements and check stubs of T.J. Construction.
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Last modified: November 10, 2007