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income from the sale of the Vancouver and Black Butte properties
in 1998 and that the overseas wire transfers in 1998, 1999, 2000,
2001, and 2002 were not loans as asserted by petitioner.
Petitioner consistently failed to report substantial amounts
of income in each year at issue. This failure is strong evidence
of fraudulent intent. See Kurnick v. Commissioner, 232 F.2d 678
(6th Cir. 1956) (consistent, substantial understatement of income
for several years is highly persuasive evidence of intent to
defraud the government), affg. T.C. Memo. 1955-31; Conforte v.
Commissioner, 74 T.C. 1160, 1201 (1980), affd. in part and revd.
on another issue 692 F.2d 587 (9th Cir. 1982); Otsuki v.
Commissioner, 53 T.C. 96, 107-108 (1969); see also Baumgardner v.
Commissioner, 251 F.2d 311, 316 (9th Cir. 1957), affg. T.C. Memo.
1956-112.
3. Inadequate Books and Records
Petitioner made available to respondent his records from
three checking accounts in the United States and his Federal
income tax returns for the years at issue. In preparation for the
trial, petitioner hired an accountant, Judy Killian (Ms. Killian),
to reconstruct his financial transactions from 1998 through 2005.
At trial, petitioner produced Ms. Killian’s report of his
reconstructed records and asserted that the report was evidence
demonstrating petitioner properly maintained books and records and
cooperated with respondent’s investigation. To the contrary,
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