Mark N. Wright and Erica Y. Wright - Page 32

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          the distributions that petitioners received from Wright &                   
          Associates but failed to include in their income.  In addition,             
          respondent has met his burden of disproving an alleged nontaxable           
          source for the $54,000 petitioners deposited into their offshore            
          bank account in 1999.  Mr. Wright initially alleged that the                
          $54,000 deposited into petitioners’ Leadenhall bank account in              
          1999 was nontaxable as it was a loan.  He claimed at trial that             
          the $54,000 was in fact petitioners’ money but was nontaxable.              
          He also claimed that the $54,000 was sent to Mr. Jones and that             
          Mr. Jones deposited it into petitioners’ Leadenhall bank account.           
          Mr. Wright’s numerous explanations are inconsistent.                        
          Accordingly, the Court concludes that respondent has proved by              
          clear and convincing evidence an underpayment of tax--the first             
          prong of the fraud test--for each of the years 1999, 2000, and              
                    2. Fraudulent Intent                                              
               To satisfy the second prong of the fraud test, respondent              
          must show that a portion of the underpayment is attributable to             
          fraud.  For the purposes of section 6663, fraud, which presents a           
          question of fact, is defined as intentional wrongdoing by the               
          taxpayer with the specific purpose of avoiding a tax believed to            
          be owed.  Fraud includes conduct intended to conceal, mislead, or           
          otherwise prevent the collection of such tax.  Stoltzfus v.                 
          United States, 398 F.2d 1002, 1004 (3d Cir. 1968); Recklitis v.             

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