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petitioner misrepresented his ownership in the Rivercliff property
for the purpose of evading income tax.
b. Funds Advanced for Petitioner’s Family
Support Obligations
Petitioner represented in his letter to respondent dated
April 8, 2004, that his obligations to Kumiko Talmage pursuant to
the stipulated judgment in the divorce case were no longer his
personal obligations because they had been assumed by NCPL to buy
Kumiko Talmage’s equity position in the Rivercliff property.
However, Kumiko Talmage transferred her ownership interest to
petitioner, not NCPL, in accordance with the stipulated judgment,
and petitioner held sole legal title to the Rivercliff property
from August 20, 2001, until June 30, 2005, after the notices of
deficiency were filed. Petitioner subsequently claimed that the
funds advanced by NCPL to pay his family support obligations were
loans which were paid in full when he transferred the Rivercliff
property to RFI.
Petitioner’s positions regarding his mandatory support and
interest payments were inconsistent and implausible, and we find
that he intended to conceal from respondent the true nature of
these payments for the purpose of evading income tax.
6. Concealment
Fraud is shown by proof that the taxpayer intended to evade
taxes known to be owing by conduct intended to conceal, mislead,
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