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121, 137 (1954)); Camien v. Commissioner, 420 F.2d 283, 287 (8th
Cir. 1970), affg. T.C. Memo. 1968-12.
Respondent contends that the following badges of fraud exist
in this case: (1) Inadequate records; (2) implausible or
inconsistent explanations; (3) a pattern of behavior indicating
an intent to mislead; and (4) filing false documents. On brief,
petitioner presented frivolous and irrelevant arguments as to the
credibility of the various witnesses, ignoring the documentation
and receipts at issue. The Court agrees with respondent.
The record establishes without a doubt that petitioner
maintained and presented inadequate and false records with
respect to the deductions claimed on his 2002 and 2003 returns.
Respondent clearly and convincingly showed, through the use of
credible witnesses, that a substantial number of documents
attached to petitioner’s 2002 and 2003 returns in an effort to
establish the propriety of his deductions for both years were
forged or falsified. Moreover, the documents presented for this
case are strikingly similar to those submitted to substantiate
petitioner’s claimed 2001 deductions in Prowse v. Commissioner,
T.C. Memo. 2006-120, and which the Court likewise found were
altered. Several professionals, such as doctors, testified at
trial that, while they had provided services to petitioner in
prior years, they had not provided services to petitioner as
purportedly claimed on the receipts that were submitted to the
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