619 F2d 619 Moore v. Commissioner of Internal Revenue

619 F.2d 619

80-1 USTC P 9429

Ralph K. MOORE (78-1164), Blue Ridge Transportation Company,
Inc. (78-1165), Petitioners-Appellants,
COMMISSIONER OF INTERNAL REVENUE, (78-1164/5), Respondent-Appellee.

No. 78-1164, 78-1165.

United States Court of Appeals,
Sixth Circuit.

April 23, 1980.

Perry Shields, Bernstein, Dougherty & Susano, W. P. Boone Dougherty, Knoxville, Tenn., for petitioners-appellants.

M. Carr Ferguson, Richard Farber, Asst. Atty. Gen., Gilbert E. Andrews, Mary Jennings, Tax Div., U. S. Dept. of Justice, Washington, D. C., Stewart E. Seigel, Chief Counsel, Internal Revenue Service, Washington, D. C., for respondent-appellee.

Before LIVELY, MARTIN and JONES, Circuit Judges.


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On November 19, 1971, the Commissioner of Internal Revenue (the "Commissioner") mailed a deficiency notice to the Appellants with respect to their 1963 and 1964 return. At the time the deficiency notices were mailed to Appellants, the period for assessment of an income tax deficiency for 1963 against the Moores, and for 1963 and 1964 against the Blue Ridge Transportation Company had expired unless fraudulent returns were filed. 26 U.S.C. § 6501(c) (1). Similarly, the period for assessment of a deficiency for 1964 against the Moore's had expired unless a fraudulent return was filed or unless gross income was understated by 25 percent.


Appellants appeal from an Order of the United States Tax Court, assessing deficiencies and penalties for Appellants' filing of fraudulent income tax returns, 26 U.S.C. § 6501. We affirm.


Both parties agree that the Commissioner has the burden of establishing by clear and convincing evidence that Appellants intentionally designed to evade a tax believed to be owing. Fraud with intent to evade a tax may be shown by circumstantial evidence, including, inter alia, evidence of false bookkeeping entries and conduct calculated to conceal sources of income and to avoid the making of normal business records. Spies v. United States, 317 U.S. 492, 494, 63 S.Ct. 364, 365, 87 L.Ed. 418 (1943). Based upon our review of the record and the Tax Court's findings of fact, we believe that the Tax Court's holding that the Appellants filed fraudulent income tax returns was not erroneous.


Accordingly, the judgment of the Tax Court is hereby affirmed.