Elizabeth Lai - Page 20

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          expenditures for personal expenses even though she had nearly               
          zero cash withdrawals from her bank accounts.  In effect,                   
          petitioner consistently drew respondent’s attention to those                
          areas in which her explanations were less than satisfactory.                
          Such behavior is hardly consistent with intent “to conceal,                 
          mislead, or otherwise prevent the collection of taxes”.  Katz v.            
          Commissioner, 90 T.C. 1130, 1143 (1988).                                    
               Petitioner contradicted herself on a few occasions during              
          the examination and at trial.  However, having had the                      
          opportunity to observe petitioner as a witness at trial, and                
          considering that many of her contradictions and disclosures could           
          not have advanced her cause, we do not attribute petitioner’s               
          contradictions to fraudulent intent.  Rather, we attribute them             
          to a series of misunderstandings and to petitioner’s fear of                
          governmental attention due to negative experiences with foreign             
               Finally, and most importantly, the evidence before us is               
          sufficiently credible to convince us that petitioner did actually           
          participate in the kind of intrafamily transactions which would             
          explain the deposits in her personal accounts, though the record            
          is not sufficiently detailed to establish that all of the                   
          deposits into petitioner’s personal accounts represent proceeds             
          from such transactions.  We therefore do not sustain respondent’s           
          imposition of the section 6663 penalty.                                     

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