Page:T.C. Memo. 2012-281.pdf/49

[*49] Although petitioner claimed that she was unaware of the obligation to keep financial records, we reject this explanation as not credible. Accordingly, petitioner's failure to keep and/or provide records of income and expenses is indicative of fraud.

A taxpayer's implausible or inconsistent explanations for his or her actions may constitute circumstantial evidence of fraudulent intent. , 796 F.2d at 307-308;, 363 F.2d 151, 153 (9th Cir. 1966); , 81 Fed. Cl. 772, 784 (2008). A taxpayer's filings and testimony may provide evidence of implausible or inconsistent explanations. , T.C. Memo. 2011-9, slip op. at 8-9.

Petitioner gave implausible and inconsistent explanations for her conduct throughout the trial and on brief. She testified that she wrote checks only at the direction of Mr. Hovind but later testified that Mr. Hovind frequently traveled and that she had implied permission to write checks. She also testified that she merely signed blank checks and that Ms. Harris was the individual primarily responsible for drafting the checks. At trial, however, petitioner acknowledged that she drafted and signed numerous checks drawn on CSE's accounts.