Temple v. Commissioner

MEMORANDUM FINDINGS OF FACT AND OPINION

¶51RUWE, JUDGE: *398 Respondent determined deficiencies and additions to tax in petitioner's Federal income tax as follows:

¶52                   Additions to tax

¶53              ___________________________________

¶54    Sec.      Sec.     Sec.

¶55 Year    Deficiency     6651(f)    6653(b)(1)   6654(a)

¶56 ____    __________    _________    __________  _________

¶57 1988    $ 26,874       N/A     $ 20,156   $ 1,718

¶58 1989     29,683     $ 22,262      N/A     2,006

¶59 1990     25,383      19,037      N/A     1,671

¶60 1991      7,078       5,309      N/A      410

¶61 1992      4,572       3,429      N/A      200

¶62After concessions, ¹ the issues for decision are: (1) Whether petitioner had unreported income from veterinary services, the sale of animals, and oil and gas royalties in the years in issue; (2) whether petitioner is liable for additions to tax for fraud under sections 6653(b)(1) ² and 6651(f); *399 (3) whether petitioner is liable for failure to pay estimated tax under section 6654(a); and (4) whether petitioner is liable for the imposition of a penalty under section 6673 for taking a frivolous and groundless position in these proceedings.

FINDINGS OF FACT

¶63Some of the facts have been stipulated and are so found. At the time the petition was filed, petitioner resided in Bristolville, Ohio.

¶64During the years in issue, petitioner and his wife*400 Catherine Temple (Mrs. Temple) lived at 5955 Stroups Hickox Road, Bristolville, Ohio (5955 property). The 5955 property was a country home with more than 300 acres.

¶65During the years in issue, petitioner was a veterinarian, and he operated a veterinary clinic out of his residence. Petitioner performed services as a veterinarian for several clients including Sea World, ³ Anheuser Busch, the Ohio Department of Wildlife, Canton Veterinary Hospital, Educational Zoological Programs, Inc., Constance A. Halle, Robert M. Sabo, and Wendy Arbogast. Petitioner also provided expert testimony for ITT Hartford.

¶66Petitioner also had property located at 5501 Stroups Hickox Road (5501 property). Petitioner used the 5955 and 5501 properties for livestock breeding. Petitioner bred and sold llamas and birds during the years in issue. Petitioner sold llamas or birds to the following customers: John C. or Maria L. Gifford, Kerney L. and Ann R. Martini, Llamas of Michigan, Swan Lake Llamas, *401 Avian Farms, Ronald G. and Carole L. DeRhodes, Sunny Hill Farms, William L. and Maureen F. Crawford, Fish and Feathers Intl., Ronald C. and Lisa Blider, Educational Zoological Programs, Inc., ⁴ Robert M. Sabo, Dennis Grodings, Jerome T. and Barbara A. Grone, Timothy L. Charles, William J. and Patricia M. Boever, Mary Z. Reed, and Wendy Arbogast.

¶67During the years in issue, petitioner's gross receipts from services provided as a veterinarian and from the sale of animals were as follows:

¶68   Year       Gross Receipts

¶69   ____       ______________

¶70   1988         ¹ $ 47,750

¶71   1989         ²  88,404

¶72   1990         ³  74,360

¶73   1991         ⁴  16,059

¶74   1992         ⁵  17,880

¶75            ____________

¶76    Total         244,453

¶77*402 Approximately half of petitioner's receipts during 1988 were in the form of checks payable to Dr. Temple, while the remaining checks were payable to Plume Enterprises. ⁵ Payments in 1989, 1990, 1991, and 1992 were almost exclusively made to Plume Enterprises, except for one check in the amount of $ 15,500 ⁶ in 1990, ⁷ one check in the amount of $ 600 in 1991, ⁸ and three checks totaling $ 1,410 in 1992. ⁹

¶78*403 With the exception of one check issued in 1989 and seven checks issued in 1992, all checks payable to Plume Enterprises were deposited in an account with Bank One, ¹⁰ account No. 400359855 (Bank One 855 account), held in the name of Plume Enterprises. ¹¹ Oxford Charter Corp. was listed as trustee on Plume Enterprises' Bank One 855 account. L. R. Mayer was the executive director of Oxford Charter Corp. during 1987.

¶79Mrs. Temple had signatory authority over the Bank One 855 account, and the monthly bank statements were sent to petitioner's residence. During the years in issue, Mrs. Temple signed the following checks drawn on Plume Enterprises' Bank One 855 account:

¶80   Year         Payee             Amount

¶81   ____         _____             ______

¶82   1989       Lets Go Travel           $ *404 240

¶83   1989       Lets Go Travel            480

¶84   1989       Cash                1,000

¶85   1989       R&J Auto Services           404

¶86   1989       DS.BA                 625

¶87   1990       R&J Auto Services           814

¶88   1990       R&J Auto Services           169

¶89   1990       Action Travel             791

¶90   1990       Radisson Resort            497

¶91   1990       Action Travel             158

¶92   1990       Admiral Bendoro            144

¶93   1990       Trundle Management  ¹       2,000

¶94   1990       Trundle Management  ²       1,500

¶95   1990       Trundle Management          500

¶96   1991       Action Travel             278

¶97   1991       Hotel Westcourt            162

¶98   1991    *405    Action Travel             318

¶99   1991       Action Travel             296

¶100   1991       Greenbelt Holiday Inn         67

¶101   1992       Control Management Inc.        400

¶102   1992       Cash                 391

¶103   1992       McMeyers & Ford, Inc.         300

¶104                          _______

¶105    Total                      11,534

¶106The one check issued in 1989 that was not deposited into the Bank One 855 account was deposited in another Bank One account, account No. 400359863 (Bank One 863 account). *406 The Bank One 863 account was held in the name of Galingale Group, Oxford Charter Corp., Trustee. ¹² L. R. Mayer was the executive director of Oxford Charter Corp. during 1987.

¶107Mrs. Temple had signatory authority over the Bank One 863 account, and during the years in issue, she signed the following checks drawn on that account:

¶108   Year         Payee             Amount

¶109   ____         _____             ______

¶110   1988       Lets Go Travel           $ 694

¶111   1988       Bavarian Manor             50

¶112   1988       Custom Parrot Network       10,000

¶113   1988       Bavarian Manor            133

¶114   1988       Sheraton Centre            531

¶115   1988       Custom Parrot Network        3,500

¶116*407    1988       Trundle Management  ¹       2,000

¶117   1989       The Sheraton Greensboro        512

¶118   1989       DS.BA                1,250

¶119   1989       Lets Go Travel            724

¶120   1989       Regal Travel             138

¶121   1990       Trundle Management  ²       2,000

¶122   1990       Home Centers             281

¶123   1991       Trundle Management  ³       2,000

¶124   1991       Trundle Management  ⁴       2,000

¶125   1991       Cash                 300

¶126   1991       Cash                 500

¶127   1992       Cash                 107

¶128                          _______

¶129    Total                      26,720

¶130*408 The seven checks issued in 1992 that were not deposited in the Bank One 855 account were deposited in an account with Cortland Savings and Banking Co.¹³ held in the name of Plume Enterprises. These checks totaled $ 8,800, and they were deposited from August to December 1992 in the Cortland Savings account. Neither petitioner nor his wife was listed as having signatory authority over the Cortland Savings account, but monthly bank statements ¹⁴ were sent to their residence, which was also the address listed on the signature card as the account

¶131During 1992, the following checks were drawn on the Plume Enterprises' Cortland Savings account:

¶132   Year         Payee             Amount

¶133   ____         _____             ______

¶134   1992       Comfort Suites           $ 164

¶135*409   1992       L. R. Mayer  ¹            125

¶136   1992       Action Travel             220

¶137   1992       Galt House              386

¶138   1992       Piccolo Co.             1,000

¶139   1992       Control Management, Inc.  ²     400

¶140   1992       McMyers & Ford  ³          300

¶141   1992       Piccolo Co.             5,458

¶142                           ______

¶143    Total                      8,053

¶144*410 All the above-listed checks were written between September and December 1992. The two largest checks drawn on the Cortland Savings account, one for $ 1,000 and the other for $ 5,458, were payable to Piccolo Co. The check for $ 1,000 was written on October 29, 1992, and the check for $ 5,458 was written on December 31, 1992. Piccolo Co. had an account with Second National Bank of Warren, ¹⁵ account No. 1163353006 (Second National 006 account). ¹⁶

¶145G. Bodor had signatory authority over Piccolo's account with Second National Bank. ¹⁷ During the years in issue, G. Bodor signed the following checks, all of which were drawn on Piccolo Co.'s Second National 006 account:

¶146*411      Year     Amount      Payee

¶147     ____     ______      _____

¶148     1988    $ 10,000     Purfle Co.

¶149     1988     14,000     Purfle Co.

¶150     1988     10,000     Purfle Co.

¶151     1988     7,630     Purfle Co.

¶152     1989     22,571     Purfle Co.

¶153     1989     5,000     Purfle Co.

¶154     1989     9,597     Purfle Co.

¶155     1990     5,000     Purfle Co.

¶156     1991     4,400     Purfle Co.

¶157     1991     4,479     Purfle Co.

¶158     1992    ¹ 2,000     Purfle Co.

¶159           ______

¶160      Total   94,677

¶161The first seven checks listed above, totaling $ 78,798, were deposited*412 into a Dollar Savings and Trust Co. account, account No. 218-000-827 (Dollar Savings 827 account). The Dollar Savings 827 account was held in the name of Purfle Co. with Eton Trust Co., Ltd., as trustee. ¹⁸ Both petitioner and Mrs. Temple had signatory authority over the Dollar Savings 827 account.

¶162Mrs. Temple signed checks payable to cash and drawn on the Dollar Savings 827 account during the years in issue as follows:

¶163     Year       Amount

¶164     ____       ______

¶165     1989      $ 4,000

¶166     1989       4,500

¶167     1989       4,500

¶168     1989       1,500

¶169     1989       2,000

¶170     1989       2,892

¶171     1989       4,833

¶172     1989       4,000

¶173     1989       4,500

¶174     1989       4,000

¶175*413              ______

¶176      Total     36,725

¶177In addition to the above-listed checks payable to cash, Mrs. Temple withdrew $ 5,000 from the Dollar Savings 827 account in the form of a cashier's check payable to petitioner. Purfle Co. was remitter on another check drawn on a Dollar Savings bank account and payable to petitioner in the amount of $ 5,000.

¶178The last four checks, listed on the previous page, and drawn on the Second National 006 account, totaled $ 15,879. All these checks were deposited into a second bank account with Dollar Savings and Trust Co., account No. 213-593-320 (Dollar Savings 320 account). The Dollar Savings 320 account was held in the name of Purfle Co. with Eaton Trust Co., Ltd., as trustee. ¹⁹ Both petitioner and Mrs. Temple had signatory authority over this account.

¶179Mrs. Temple signed checks payable to cash and drawn on the Dollar Savings 320 account during the years in issue*414 as follows:

¶180     Year       Amount

¶181     ____       ______

¶182     1990      $ 1,500

¶183     1990        500

¶184     1990        500

¶185     1990       2,500

¶186     1991       3,000

¶187     1991       2,000

¶188     1991       2,000

¶189     1991       1,500

¶190     1991        200

¶191     1992       2,000

¶192     1992       2,500

¶193     1992       2,000

¶194             ______

¶195      Total     20,200

¶196On May 26, 1992, B. L. Holtzhauer replaced petitioner and Mrs. Temple as the person authorized to sign checks on the Dollar Savings 320 account. The following checks payable to cash were signed by B. L. Holtzhauer:

¶197     Year       Amount

¶198     ____       ______

¶199     1992      $ 1,000

¶200     1992       1,000

¶201     1992       2,045

¶202             ______

¶203*415       Total      4,045

¶204On December 7, 1992, the Dollar Savings 320 account was closed, and the proceeds were deposited into Barclays Bank, Nassau, Bahamas.

¶205Prior to February 1985, petitioner was title owner of the 5501 and 5955 properties. On February 28, 1985, petitioner granted his interest in the 5501 and 5955 properties to Black Creek Management Co. with Nassau Life Insurance Co., ²⁰ Ltd., as trustee ²¹ by warranty deeds.

¶206*416 Oil and gas drilling sites were located on both the 5501 and 5955 properties. On February 1, 1985, petitioner executed an Exchange of Royalty Interest with Old Labrador Investment Co. with Nassau Life Insurance Co., Ltd., as trustee. The Exchange of Royalty Interest indicates that petitioner granted Old Labrador Investment Co. with Nassau Life Insurance Co., Ltd., as trustee his interest in the oil and gas leases for both properties for a stated consideration of $ 10. The Exchange of Royalty Interest was recorded in the Trumbull County Recorder's Office on February 28, 1985.

¶207On January 25, 1988, Black Creek Management Co. with Nassau Life Insurance Co., Ltd., as trustee granted by warranty deed for a stated consideration of $ 1 the 5501 and 5955 properties to Trundle Management with Eton Trust Co., Ltd., as trustee ²² by warranty deed. ²³ On the same day, Old Labrador Investment Co. with Nassau Life Insurance Co., Ltd., as trustee, granted for $ 1 in consideration its royalty interest in the oil and gas leases in both properties to Trundle Management with Eton Trust Co., Ltd., as trustee.

¶208*417 Petitioner and his wife continued to reside at the 5955 property. Petitioner continued to use the 5501 and 5955 properties for livestock operations and to operate a veterinary clinic. Petitioner continued to exercise dominion and control over the 5501 and 5955 properties.

¶209Pennzoil Oil and Scavenger Oil paid royalties for use of the oil and gas wells located on both properties during the years in issue. Royalty payments from Pennzoil and Scavenger were as follows:

¶210     Year       Royalty Income

¶211     ____       ______________

¶212     1990        ¹ $ 2,789

¶213     1991        ²   2,199

¶214     1992        ³   2,203

¶215                _______

¶216      Total         7,191

¶217With the exception of one deposit, all checks were deposited into an account with the Second National Bank*418 of Warren, account No. 1163506106 (Second National 106 account). The account was held in the name of Trundle Management, Eton Trust Co., Ltd., Trustee. ²⁴ Originally, Mrs. Temple and P. Evans had signature authority over the account. Petitioner's address was listed on the signature card. On July 7, 1992, B. L. Holtzhauer's name was added to the signature card. The address listed as B. L. Holtzhauer's address on the signature card was petitioner's residence. Bank statements were sent to petitioner's residence.

¶218During the years in issue, Mrs. Temple signed checks drawn on the Second National 106 account as follows:

¶219     Year     Amount   Payee

¶220     ____     ______   _____

¶221     1989      $ 500   Cash

¶222     1989       500   Cash

¶223     1989       312   DS.BA

¶224     1990      1,000   Cash

¶225     1990     *419 3,450   Sweda Heating & Cooling

¶226     1990      1,316   R.C. Drywall

¶227            _____

¶228      Total  ¹  7,078

¶229Petitioner was in the process of remodeling and expanding his personal residence in 1989.

¶230Petitioner made a $ 5,000 deposit into the Second National 106 account in 1988. The source of the $ 5,000 deposit was a bank check payable to petitioner drawn from one of the Dollar Savings and Trust accounts.

¶231Petitioner filed Form 1040, U.S. Individual Income Tax Return, for the years 1975 through 1979. Petitioner did not file a Federal income tax return for 1980, and he has not filed a Federal income tax return for any year since 1980.

OPINIONI. UNREPORTED INCOME

¶232Petitioner failed to file Federal income tax returns for the years 1988, 1989, 1990, 1991, and 1992. Respondent determined that petitioner was engaged in the business activity of performing*420 veterinary services and selling livestock during those years. Respondent computed petitioner's business gross receipts based on deposits made to bank accounts which petitioner controlled during those years, taking into account transfers and nontaxable items. Respondent also determined that petitioner received royalty income during the years 1990, 1991, and 1992.

¶233Petitioner does not dispute the existence of the transactions that produced the income that respondent attributes to him. Rather, petitioner argues that the income was received by, and deposited into bank accounts of, valid irrevocable trusts. Petitioner asserts that respondent has improperly imputed gross income received by a trust to petitioner and has improperly failed to recognize the trust as a separate entity. We note, as a preliminary matter, that petitioner did not provide copies of any trust agreements, nor did he or his wife testify at trial.

¶234Section 61(a) provides, in part, that "gross income means all income from whatever source derived, including (but not limited to)" compensation for services, gains derived from dealing in property and royalties. It is fundamental to our system of taxation that income must be*421 taxed to the one who earns it. See Commissioner v. Culbertson, 337 U.S. 733, 739-740, 93 L. Ed. 1659, 69 S. Ct. 1210 (1949); Lucas v. Earl, 281 U.S. 111, 114-115, 74 L. Ed. 731, 50 S. Ct. 241 (1930). Income can be attributed to an individual when the recipient has total control or dominion over the funds and uses the funds for personal purposes. See Davis v. United States, 226 F.2d 331, 334 (6th Cir. 1955); Woods v. Commissioner, T.C. Memo 1989-611, affd. without published opinion 929 F.2d 702 (6th Cir. 1991).

A. VETERINARIAN SERVICES AND THE SALE OF LIVESTOCK

¶235Petitioner provided veterinarian services, and he bred and sold animals. As a result, petitioner received payments by checks totaling $ 47,750 in 1988, ²⁵ $ 88,404 in 1989, ²⁶ $ 74,360 in 1990, ²⁷ $ 16,059 in 1991, ²⁸ and $ 17,880 in 1992. ²⁹ In 1988, checks totaling $ 11,000 were payable to Dr. Temple, while the remaining checks totaling $ 36,750 were payable to Plume Enterprises and deposited into the Bank One 855 account. This account was fashioned as a trustee account, but all funds deposited in the account were based on payments petitioner received for veterinarian services that he provided and from the sale*422 of animals that he sold. Mrs. Temple had signatory authority over the account.

¶236In 1989, petitioner received checks totaling $ 88,404 for the services he provided as a veterinarian and from the sale of animals. Petitioner deposited checks totaling $ 87,804 in the Bank One 855 account, and the remaining check for $ 600 in the Bank One 863 account. Petitioner's spouse, Mrs. Temple, had signatory authority over both accounts.

¶237In 1990, petitioner received checks totaling $ 74,360 for the services he provided as a veterinarian and from the sale of animals. Petitioner deposited checks totaling $ 74,360 into the Bank One 855 account, which Mrs. Temple had signatory authority over.

¶238In 1991, petitioner received checks totaling $ 16,059 for the services he provided as a veterinarian and from the sale of animals. ³⁰ Petitioner deposited checks totaling $ 16,059 into the Bank One 855 account, which Mrs. Temple had signatory*423 authority over.

¶239In 1992, petitioner received checks totaling $ 17,880 for the services he provided as a veterinarian and from the sale of animals. Petitioner deposited checks totaling $ 7,670 in the Bank One 855 account and checks totaling $ 1,410 in the Bank One 863 account. Mrs. Temple had signatory authority over both accounts.

¶240Amounts deposited into the Bank One 855 account in the name of Plume Enterprises and the Bank One 863 account in the name of Galingale Group constituted income of petitioner. Petitioner earned the income, he and his wife exercised total dominion and control over those funds, and they expended the funds for their personal expenses. From these two accounts alone, Mrs. Temple signed checks totaling $ 38,254 ³¹ for personal items, including cash, travel agencies, hotels, auto services and deposits to other accounts over which*424 she had signatory authority.

¶241The remaining payments received by petitioner in 1992, checks totaling $ 8,800, from services he provided as a veterinarian and animals that he sold were deposited into the Cortland Savings account between August and December 1992. Neither petitioner nor his wife was listed as having signatory authority over the Cortland Savings account; however, monthly bank statements were sent to petitioner's residence, and the signature card listed petitioner's address as the account owner's address.

¶242During the period from September to December 1992, checks totaling $ 8,053 were drawn on the Cortland Savings account. A majority of those funds, checks totaling $ 6,458, were deposited in an account with the Second National Bank of Warren. ³² G. Bodor had signatory authority over the Second National 006 account, and during the years in issue she wrote checks totaling*425 $ 94,677 and deposited them into one of two Dollar Savings and Trust accounts. Petitioner and his wife had signatory authority over both Dollar Savings and Trust accounts. We find that the $ 8,800 was earned by petitioner and then funneled through the various accounts as part of petitioner's overall plan to conceal income. Once we view through the layers of nominee accounts through which the funds were channeled, petitioner remained in control of the funds.

B. ROYALTY INCOME

¶243A fundamental principle of income tax law is that economic substance prevails over form. See Gregory v. Helvering, 293 U.S. 465, 79 L. Ed. 596, 55 S. Ct. 266 (1935). "When the form of the transaction has not, in fact, altered any cognizable economic relationships, *426 we will look through that form and apply the tax law according to the substance of the transaction." Zmuda v. Commissioner, 79 T.C. 714, 720 (1982), affd. 731 F.2d 1417 (9th Cir. 1984). This rule applies regardless of whether the entity has a separate existence recognized under State law and whether, in form, it is a trust, a common-law business trust, or some other form of jural entity. See id.

¶244We find the various transactions which purported to result in a transfer of petitioner's interest in the 5501 and 5955 properties and his royalty interest in those properties to be without economic substance. Petitioner always remained in possession of the properties, and he continued to control the properties as he had done before the transfers.

¶245Petitioner and his wife continued to live in their residence located on the 5955 property. Petitioner continued to use the properties for livestock breeding, sale of livestock, and operation of a veterinary clinic. Petitioner, regardless of legal title, exercised dominion and control over the properties.

¶246Payments of $ 7,191 were made for the use of oil and gas wells located on petitioner's properties during the years in*427 issue. With the exception of one check for $ 1,800, payments totaling $ 5,391 were deposited into the Second National 106 account. Mrs. Temple had signatory authority over this account, petitioner's address was listed on the signature card, and bank statements were mailed to petitioner's residence.

¶247Mrs. Temple signed checks totaling $ 2,000 payable to cash in 1989 and 1990 and checks totaling $ 4,766 in 1990 to contractors from this account. Petitioner was in the process of remodeling and expanding his personal residence in 1989.

¶248The one check for $ 1,800 that was not deposited in the Second National 106 account was deposited into the Bank One 855 account. Mrs. Temple signed checks totaling $ 11,534 for personal items including, cash, hotels, several travel agencies, and an automobile service shop drawn on this account.

¶249Petitioner argues that if the income items in appendixes F through J are attributed to him, then respondent has failed to subtract expenses or deductions from petitioner's gross receipts for each year in issue. However, petitioner did not provide any evidence regarding allowable expenses or deductions, and neither petitioner nor his wife testified.

¶250Even in criminal*428 tax evasion cases, where the Government bears the greater burden of proof beyond a reasonable doubt, it is well settled "that evidence of unexplained receipts shifts to the taxpayer the burden of coming forward with evidence as to the amount of offsetting expenses, if any." Siravo v. United States, 377 F.2d 469, 473 (1st Cir. 1967); see also Franklin v. Commissioner, T.C. Memo 1993-184. Where the taxpayer has failed to file a return, or his return shows no receipts from a particular activity, then the assumption that he, more readily than respondent, has access to evidence of deductions or other offsetting amounts makes the nonexistence of such amounts a fair presumption, at least as an initial matter and absent a satisfactory explanation of such nonexistence or the production of some probative evidence. See Franklin v. Commissioner, supra.

¶251We hold that petitioner had unreported taxable income of $ 47,750 in 1988, $ 88,404 in 1989, $ 77,149 in 1990, $ 18,258 in 1991, and $ 20,083 in 1992. See appendixes F through J.

II. ADDITIONS TO TAX FOR FRAUD

¶252The next issue is whether any part of the underpayment of income tax for each year in issue is*429 due to fraud. Respondent's notice of deficiency determined that petitioner is liable for the addition to tax for fraud imposed under section 6653(b)(1) ³³ for the taxable year 1988 and for the addition to tax for fraudulent failure to file under section 6651(f) ³⁴ for the taxable years 1989, 1990, 1991, and 1992. Each section imposes an addition to tax equal to 75 percent of the portion of an underpayment that is attributable to fraud. Because these provisions are analyzed similarly as to the determination of fraudulent intent, we consolidate our discussion of respondent's fraud determinations. See Clayton v. Commissioner, 102 T.C. 632, 653 (1994).

¶253*430Respondent has the burden of proving by clear and convincing evidence that an underpayment exists for the years in issue and that some portion of the underpayment is due to fraud. See sec. 7454(a); Rule 142(b); Niedringhaus v. Commissioner, 99 T.C. 202, 210 (1992). Consequently, respondent must establish: (1) Petitioner has underpaid his taxes for each year; and (2) some part of the underpayment is due to fraud. See DiLeo v. Commissioner, 96 T.C. 858, 873 (1991), affd. 959 F.2d 16 (2d Cir. 1992). Fraud is the intentional wrongdoing on the part of a taxpayer to evade a tax believed to be owing. See Petzoldt v. Commissioner, 92 T.C. 661, 698 (1989). Where fraud is determined for each of several years, respondent's burden applies separately or each of the years. See Drieborg v. Commissioner, 225 F.2d 216, 219-220 (6th Cir. 1955), affg. in part and revg. in part a Memorandum Opinion of this Court dated Feb. 24, 1954.

A. UNDERPAYMENT OF TAXES

¶254Based on the evidence presented and our previous analysis, we find that respondent has clearly and convincingly established that petitioner understated his taxable income by $ 47,750*431³⁵ in 1988, $ 88,404 ³⁶ in 1989, $ 77,149 ³⁷ in 1990, $ 18,258 ³⁸ in 1991, and $ 20,083 ³⁹ in 1992. Petitioner underpaid his taxes for each year in issue.

B. FRAUDULENT INTENT

¶255Respondent must prove that a portion of the underpayment is attributable to the fraudulent intent of petitioner. Fraud is the intentional wrongdoing motivated by a specific purpose to evade a tax known or believed to be owing. See Stoltzfus v. United States, 398 F.2d 1002, 1004 (3d Cir. 1968). The existence of fraud is a question of fact to be resolved upon consideration of the entire record. See Gajewski v. Commissioner, 67 T.C. 181, 199 (1976), affd. without published opinion 578 F.2d 1383 (8th Cir. 1978).

¶256Direct proof of a taxpayer's intent is rarely available; thus, fraud may be proven by circumstantial evidence, and reasonable inferences may be drawn from*432 the relevant facts. See Spies v. United States, 317 U.S. 492, 499, 87 L. Ed. 418, 63 S. Ct. 364 (1943); Stephenson v. Commissioner, 79 T.C. 995, 1006 (1982), affd. 748 F.2d 331 (6th Cir. 1984). Any conduct, the likely effect of which would be to mislead or to conceal may establish an affirmative act of evasion. See Spies v. United States, supra at 499.

¶257The courts have relied upon a number of indicia of fraud in deciding whether an underpayment of tax is due to fraud. While no single factor is necessarily sufficient to establish fraud, the existence of several indicia is persuasive circumstantial evidence of fraud. See Petzoldt v. Commissioner, supra.

¶258Respondent argues that the following factors or "badges" of fraud are present in this case: (1) A substantial and consistent understatement of income; (2) extensive dealings in cash; (3) use of nominee accounts; ⁴⁰ (4) failure to cooperate with revenue agents; and (5) petitioner's level of education.

*433 1. SUBSTANTIAL AND CONSISTENT UNDERSTATEMENT OF INCOME

¶259Consistent failure to report substantial amounts of income over a number of years is, standing alone, highly persuasive evidence of fraudulent intent. See Kurnick v. Commissioner, 232 F.2d 678 (6th Cir. 1956), affg. T.C. Memo 1955-31; Reash v. Commissioner, 218 F.2d 954 (6th Cir. 1954), affg. per curiam a Memorandum Opinion of this Court dated Dec. 28, 1953. In this case, there is a substantial and consistent underpayment of tax for each of the years in issue.

2. EXTENSIVE DEALINGS IN CASH

¶260Dealing in cash to avoid scrutiny of one's finances is a badge of fraud. See Bradford v. Commissioner, 796 F.2d 303, 307-308 (9th Cir. 1986), affg. T.C. Memo 1984-601. Petitioner made numerous and substantial cash transactions during the 5 years in issue.

¶261During the years in issue, Mrs. Temple signed checks payable to cash totaling $ 59,223 that were drawn on four different accounts, all of which were fashioned as trust accounts. Mrs. Temple was not a named trustee on any of these accounts. For the short period of time that B. L. Holtzauer replaced petitioner and Mrs. Temple*434 on the Dollar Savings 320 account, checks totaling $ 4,045 were issued payable to cash. The last check issued to cash in the amount of $ 2,045 was used toward the purchase of a bank check for $ 2,645. The Dollar Savings 320 account was closed, and the proceeds deposited into an account in Nassau, Bahamas.

¶262Wendy Arbogast was one of petitioner's clients. Ms. Arbogast testified that she had purchased a bird from petitioner for $ 1,400 but paid $ 800 of the purchase price in cash. Ms. Arbogast testified that petitioner told her when she started going to him for veterinary services that he preferred cash payments.

3. USE OF NOMINEE ACCOUNTS

¶263Use of nominees to conceal assets that a taxpayer has unfettered control over is evidence of fraud. See Friedman v. Commissioner, T.C. Memo 1968-145, affd. 421 F.2d 658 (6th Cir. 1970).

¶264Petitioner received checks from various customers for providing veterinarian services, the sale of animals, and royalties and deposited them into various bank accounts fashioned as trustee accounts. These deposits were derived from income earned by and taxable to petitioner. The accounts were fashioned as trust accounts in an effort by petitioner*435 to disguise the true ownership of the accounts.

4. FAILURE TO COOPERATE WITH REVENUE AGENTS

¶265Failure to cooperate with revenue agents during the audit phase of a case is an additional indication of guilty knowledge on a taxpayer's part. See Professional Servs. v. Commissioner, 79 T.C. 888, 933 (1982).

¶266Revenue Agent Gentile conducted the examination of petitioner for the years in issue. Mr. Gentile testified that as an initial step in his examination of petitioner, he sent petitioner two appointment letters. However, petitioner did not appear at either appointment and did not provide any books or records during the course of the examination.

5. LEVEL OF EDUCATION

¶267A taxpayer's level of education and his prior history of filing proper Federal income tax returns are relevant. See Stephenson v. Commissioner, 79 T.C. 995 (1982).

¶268Petitioner is a doctor of veterinary medicine. A person with his level of education should know that he cannot escape liability from income taxation and still enjoy control and dominion over all the income he received by establishing nominee accounts. Petitioner filed Federal income tax returns for 1975, 1976, 1977, 1978, and 1979. *436 His filing of proper returns for years prior to the years in issue demonstrates that he was aware of his income tax responsibilities.

C. CONCLUSION

¶269The facts and circumstances of this case clearly and convincingly support respondent's determination of fraud for each year in issue.

III. ADDITIONS TO TAX FOR FAILURE TO PAY ESTIMATED TAX

¶270For 1988, 1989, 1990, 1991, and 1992, respondent determined additions to tax for failure to pay estimated tax under section 6654. If there is an underpayment of estimated tax for any of the years in issue, section 6654(a) imposes an addition to tax equal to the interest rate established under section 6621 applied to the amount of the underpayment for the period of the underpayment. This addition to tax is mandatory and, unless one of the exceptions in section 6654(e) applies, is imposed regardless of reasonable cause or extenuating circumstances. See Dodge v. Commissioner, 96 T.C. 172, 183 (1991), affd. on this issue 981 F.2d 350 (8th Cir. 1992); Grosshandler v. Commissioner, 75 T.C. 1, 21 (1980).

¶271The Commissioner's determinations of additions to tax under section 6654 are presumed to be correct, and the taxpayer*437 bears the burden of proving that he is not liable for those additions. See Rule 142(a). Petitioner did not offer any evidence that he paid estimated tax for 1988, 1989, 1990, 1991, and 1992. Accordingly, we sustain respondent's determination.

IV. PENALTY PURSUANT TO SECTION 6673

¶272Under section 6673, this Court may award a penalty to the United States of up to $ 25,000 when the proceeding has been instituted or maintained by the taxpayer primarily for delay or if the taxpayer's position in such proceeding is frivolous or groundless. See sec. 6673. Based on the record, we conclude that such an award is appropriate in this case. Petitioner's argument that he can escape liability for income tax by purporting to assign earnings from his personal activities to a series of trusts is frivolous. Accordingly, a penalty is awarded to the United States under section 6673 in the amount of $ 5,000.

¶273We have considered all arguments in this case. Those arguments not discussed herein are without merit or irrelevant. To reflect the foregoing,

¶274An appropriate order will be issued granting respondent's motion for a penalty, and decision will be entered under Rule 155.

¶275APPENDIX A

¶2761988 Gross Receipts

¶277As*438 Stated in Notice of Deficiency  ¹    Concessions    Total

¶278_____________________________________    ___________    _____

¶279   Payor         Amount

¶280   _____         ______

¶281Sea World of Ohio     $ 500           0      $ 500

¶282Sea World of Ohio      500           0       500

¶283Sea World of Ohio     1,000           0      1,000

¶284Sea World of Ohio     1,500           0      1,500

¶285Swan Lake Llamas      5,750           0      5,750

¶286Sea World of Ohio     1,500           0      1,500

¶287Society Bank        5,750         ($ 5,750)     0

¶288Bank One           200           (200)     0

¶289Sea World of Ohio     1,500           0      1,500

¶290Sea World of Ohio     1,500           0      1,500

¶291Sea World of Ohio     1,500           0      1,500

¶292Sea World of Ohio     5,000  *439          0      5,000

¶293Jerome T. Grone      2,500           0      2,500

¶294Sea World of Ohio     1,500           0      1,500

¶295Sunny Hill Farm      1,500           0      1,500

¶296John C. Gifford       100           0       100

¶297Sunny Hill Farm      13,500           0     13,500

¶298Piccolo Company      10,000         (10,000)     0

¶299John C. Gifford      1,100           0      1,100

¶300John C. Gifford      7,300           0      7,300

¶301Custom Parrot

¶302Network          3,500          (3,500)     0

¶303Dollar Bank

¶304Cashier Check      15,000         (15,000)     0

¶305            ______         _________    ______

¶306 Total          82,200         (34,450)    47,750

¶307*440                APPENDIX B

¶308             1989 Gross Receipts

¶309As Stated in Notice of Deficiency n1   Concessions      Total

¶310_________________________________    ___________      _____

¶311   Payor        Amount

¶312   _____        ______

¶313Llamas of Michigan    $ 2,450         0       $ 2,450

¶314Llamas of Michigan    22,050         0        22,050

¶315Dennis Grodings       900         0         900

¶316Sea World of Ohio     1,500         0        1,500

¶317John C. Gifford      9,500         0        9,500

¶318Sea World of Ohio     1,500         0        1,500

¶319Sea World of Ohio      105         0         105

¶320Sea World of Ohio     1,500         0        1,500

¶321John C. Gifford      1,200         0        1,200

¶322Sea World of Ohio     1,500         0       *441  1,500

¶323State of Ohio       3,649         0        3,649

¶324Valley Las Vegas      1,815       ($ 1,815)        0

¶325Ronald G. DeRhodes    22,000         0        22,000

¶326Canton Veterinary

¶327Hospital         5,000         0        5,000

¶328Sea World of Ohio     3,000         0        3,000

¶329Wendy H. Arbogast     1,800         0        1,800

¶330Constance A. Halle      150         0         150

¶331William C. Crawford     200         0         200

¶332William C. Crawford    1,000         0        1,000

¶333Sea World of Ohio     1,500         0        1,500

¶334Sea World of Ohio     1,500         0        1,500

¶335Sea World of Ohio     1,500         0        1,500

¶336Ronald C. Blidar      1,800         0        1,800

¶337Ronald C. Blidar      1,000         0    *442     1,000

¶338Sea World of Ohio     1,500         0        1,500

¶339John C. Gifford       600         0         600

¶340            ______       _________     _______

¶341 Total          90,219       (1,815)      88,404

¶342               APPENDIX C

¶343             1990 Gross Receipts

¶344As Stated in Notice of Deficiency      Concessions    Total

¶345_________________________________      ___________    _____

¶346   Payor        Amount

¶347   _____        ______

¶348John C. Gifford      9,500           0     $ 9,500

¶349Educational

¶350 Zoological

¶351 Programs, Inc.       100           0       100

¶352Kerney L. Martini     8,500           0      8,500

¶353Scavenger Oil Corp.    1,800         ($ 1,800)       0

¶354Sea World of Ohio     1,500           0      1,500

¶355Kerney L. Martini    *443  7,500           0      7,500

¶356Intuit             2           0        2

¶357Sea World of Ohio     1,500           0      1,500

¶358Educational

¶359 Zoological

¶360 Programs, Inc.       350           0       350

¶361Sea World of Ohio     1,500           0      1,500

¶362Sea World of Ohio     1,200           0      1,200

¶363Sea World of Ohio     1,500           0      1,500

¶364Wendy H. Arbogast      200           0       200

¶365Educational

¶366 Zoological

¶367 Programs Inc.       100           0       100

¶368Sea World of Ohio     1,500           0      1,500

¶369Sea World of Ohio     1,500           0      1,500

¶370Robert Sabo         145           0       145

¶371Sea World of Ohio     1,500           0      1,500

¶372Ronald G. DeRhodes     1,200    *444        0      1,200

¶373State of Ohio        728           0       728

¶374Wendy H. Arbogast     1,800           0      1,800

¶375Sea World of Ohio     1,500           0      1,500

¶376Sea World of Ohio     1,500           0      1,500

¶377Robert Sabo         135           0       135

¶378Robert Sabo         210           0       210

¶379Sea World of Ohio     1,500           0      1,500

¶380Educational

¶381 Zoological

¶382 Programs, Inc.       100           0       100

¶383William Boever      15,500           0      15,500

¶384Robert Sabo          90           0        90

¶385Sea World of Ohio     1,500           0      1,500

¶386Sea World of Ohio     1,500           0      1,500

¶387Sea World of Ohio     9,000           0      9,000

¶388 Total*445¹ 76,160         (1,800)    74,360

¶389             1990 Royalty Income

¶390   Payor         Amount       Concessions     Total

¶391   _____         ______       ___________    ______

¶392Scavenger Oil Corp.   ¹ $ 1,800         $ 0      $ 1,800

¶393Pennzoil Products       257          0        257

¶394Pennzoil Products       289          0        289

¶395Pennzoil Products       443          0        443

¶396             ______        _______    _______

¶397 Total           2,789          0       2,789

¶398             ______        _______    _______

¶399*446  Total Income  ²    78,949        (1,800)     77,149

¶400               APPENDIX D

¶401             1991 Gross Receipts

¶402As Stated in Notice of Deficiency   Concessions       Total

¶403_________________________________ *447   ___________       _____

¶404   Payor        Amount

¶405   _____        ______

¶406Robert Sabo        $ 600        0         $ 600

¶407Robert Sabo         70        0          70

¶408Robert Sabo         35        0          35

¶409Fish and Feathers

¶410International       250        0          250

¶411Robert Sabo        1,000        0         1,000

¶412Robert Sabo         500        0          500

¶413Bad Film         10,500      ($ 10,500)         0

¶414Educational

¶415 Zoological

¶416 Programs Inc.       200        0          200

¶417State of Ohio       1,000        0         1,000

¶418Robert Sabo         35        0          35

¶419Robert Sabo         123        0          123

¶420Avian Farms        2,750        0      *448    2,750

¶421Mary Z. Reed        500        0          500

¶422Avian Farms         35        0          35

¶423ITT Hartford        595        0          595

¶424Robert Sabo         66        0          66

¶425Avian Farms        1,000        0         1,000

¶426Sea World of Ohio     1,800        0         1,800

¶427Avian Farms        1,000        0         1,000

¶428Mary Z. Reed       1,500        0         1,500

¶429Sea World of Ohio     1,800        0         1,800

¶430Sea World of Ohio     1,200        0         1,200

¶431           ________     __________      ______

¶432 Total         26,559      (10,500)       16,059

¶433             1991 Royalty Income

¶434   Payor        Amount      Concessions      Total

¶435*449   _____        ______      ___________      _____

¶436Pennzoil Products     $ 249        $ 0        $ 249

¶437Pennzoil Products      209         0         209

¶438Pennzoil Products      241         0         241

¶439Pennzoil Products      337         0         337

¶440Pennzoil Products      217         0         217

¶441Pennzoil Products      578         0         578

¶442Pennzoil Products      369         0         369

¶443Total          2,199         0        2,199

¶444            ______       ________      ______

¶445  Total Income  ¹   28,758       (10,500)      18,258

¶446*450      APPENDIX E

¶447             1992 Gross Receipts

¶448As Stated in Notice of Deficiency    Concessions      Total

¶449_________________________________    ___________      _____

¶450   Payor        Amount

¶451   _____        ______

¶452Educational

¶453 Zoological

¶454 Programs, Inc.     $ 100         0        $ 100

¶455Anheuser-Busch      2,000         0        2,000

¶456Anheuser-Busch      2,700         0        2,700

¶457Anheuser-Busch      1,400         0        1,400

¶458Timothy L. Charles     500         0         500

¶459Anheuser-Busch      1,400         0        1,400

¶460Avian Farms         560         0         560

¶461Avian Farms         350         0         350

¶462Avian Farms         70         0          70

¶463Anheuser-Busch      1,600         0        1,600

¶464Anheuser-Busch*451      1,200         0        1,200

¶465Anheuser-Busch      1,200         0        1,200

¶466Anheuser-Busch      1,200         0        1,200

¶467Cortland Savings

¶468Bank            391       ($ 391)        0

¶469Anheuser-Busch      1,200         0        1,200

¶470Anheuser-Busch      1,200         0        1,200

¶471Anheuser-Busch      1,200         0        1,200

¶472            ______       _______      _______

¶473 Total          8,271        (391)       17,880

¶474             1992 Royalty Income

¶475   Payor        Amount      Concessions      Total

¶476   _____        ______      ___________      _____

¶477Pennzoil Products     $ 155        $ 0        $ 155

¶478Pennzoil Products      281         0         281

¶479Pennzoil Products    *452   257         0         257

¶480Pennzoil Products      332         0         332

¶481Pennzoil Products      745         0         745

¶482Pennzoil Products      432         0         432

¶483           ________        ______      _______

¶484Total          2,203         0        2,203

¶485           ________        ______      _______

¶486  Total Income  ¹   20,474        (391)      20,083

¶487               APPENDIX F

¶488             1988 Gross Receipts

¶489                            Deposited in

¶490   Payor       Amount    Payee          Account No.

¶491*453    _____       ______    _____         ____________

¶492Sea World of Ohio    $ 500    Dr. Temple

¶493Sea World of Ohio     500    Dr. Temple

¶494Sea World of Ohio    1,000    Dr. Temple

¶495Sea World of Ohio    1,500    Dr. Temple

¶496Swan Lake Llamas    5,750    Plume Enterprises     400359855

¶497Sea World of Ohio    1,500    Dr. Temple

¶498Sea World of Ohio    1,500    Dr. Temple

¶499Sea World of Ohio    1,500    Dr. Temple

¶500Sea World of Ohio    1,500    Dr. Temple

¶501Sea World of Ohio    5,000    Plume Enterprises     400359855

¶502Jerome T. Grone     2,500    Plume Enterprises     400359855

¶503Sea World of Ohio    1,500    Dr. Temple

¶504Sunny Hill Farm     1,500    Plume Enterprises     400359855

¶505John C. Gifford      100    Plume Enterprises     400359855

¶506Sunny Hill Farm    13,500    Plume Enterprises     400359855

¶507John C. Gifford     1,100    Plume Enterprises     400359855

¶508John C. Gifford     7,300    Plume Enterprises     400359855

¶509          _______

¶510 Total        47,750

¶511*454                APPENDIX G

¶512             1989 Gross Receipts

¶513                           Deposited in

¶514   Payor      Amount     Payee         Account No.

¶515   _____      ______     _____         ____________

¶516Llamas of Michigan  $ 2,450    Plume Enterprises     400359855

¶517Llamas of Michigan   22,050    Plume Enterprises     400359855

¶518Dennis Grodings      900    Plume Enterprises     400359855

¶519Sea World of Ohio    1,500    Plume Enterprises     400359855

¶520John C. Gifford     9,500    Plume Enterprises     400359855

¶521Sea World of Ohio    1,500    Plume Enterprises     400359855

¶522Sea World of Ohio     105    Plume Enterprises     400359855

¶523Sea World of Ohio    1,500    Plume Enterprises     400359855

¶524John C. Gifford     1,200    Plume Enterprises     400359855

¶525Sea World of Ohio    1,500    Plume Enterprises     400359855

¶526State of Ohio      3,649    Plume Enterprises     400359855

¶527Ronald*455 G. DeRhodes   22,000    Plume Enterprises     400359855

¶528Canton Veterinary

¶529Hospital        5,000    Plume Enterprises     400359855

¶530Sea World of Ohio    3,000    Plume Enterprises     400359855

¶531Wendy H. Arbogast    1,800    Plume Enterprises     400359855

¶532Constance A. Halle    150    Plume Enterprises     400359855

¶533William C. Crawford    200    Plume Enterprises     400359855

¶534William C. Crawford   1,000    Plume Enterprises     400359855

¶535Sea World of Ohio    1,500    Plume Enterprises     400359855

¶536Sea World of Ohio    1,500    Plume Enterprises     400359855

¶537Sea World of Ohio    1,500    Plume Enterprises     400359855

¶538Ronald C. Blidar    1,800    Plume Enterprises     400359855

¶539Ronald C. Blidar    1,000    Plume Enterprises     400359855

¶540Sea World of Ohio    1,500    Plume Enterprises     400359855

¶541John C. Gifford      600    Galingale Group      400359863

¶542          _______

¶543 Total        88,404

¶544               APPENDIX H

¶545*456            1990 Gross Receipts

¶546                           Deposited in

¶547   Payor       Amount      Payee        Account No.

¶548   _____       ______      _____       ____________

¶549John C. Gifford    $ 9,500    Plume Enterprises     400359855

¶550Educational

¶551 Zoological

¶552 Programs, Inc.     100    Plume Enterprises     400359855

¶553Kerney L. Martini    8,500    Plume Enterprises     400359855

¶554Sea World of Ohio    1,500    Plume Enterprises     400359855

¶555Kerney L. Martini    7,500    Plume Enterprises     400359855

¶556Intuit           2    Plume Enterprises     400359855

¶557Sea World of Ohio    1,500    Plume Enterprises     400359855

¶558Educational

¶559 Zoological

¶560 Programs, Inc.     350    Plume Enterprises     400359855

¶561Sea World of Ohio    1,500    Plume Enterprises     400359855

¶562Sea World of Ohio    1,200    Plume Enterprises     400359855

¶563Sea World of Ohio    1,500    Plume Enterprises     400359855

¶564Wendy*457 H. Arbogast     200    Plume Enterprises     400359855

¶565Educational

¶566 Zoological

¶567 Programs Inc.      100    Plume Enterprises     400359855

¶568Sea World of Ohio    1,500    Plume Enterprises     400359855

¶569Sea World of Ohio    1,500    Plume Enterprises     400359855

¶570Robert Sabo        145    Plume Enterprises     400359855

¶571Sea World of Ohio    1,500    Plume Enterprises     400359855

¶572Ronald G. DeRhodes   1,200    Plume Enterprises     400359855

¶573State of Ohio       728    Plume Enterprises     400359855

¶574Wendy H. Arbogast    1,800    Plume Enterprises     400359855

¶575Sea World of Ohio    1,500    Plume Enterprises     400359855

¶576Sea World of Ohio    1,500    Plume Enterprises     400359855

¶577Robert Sabo        135    Plume Enterprises     400359855

¶578Robert Sabo        210    Plume Enterprises     400359855

¶579Sea World of Ohio    1,500    Plume Enterprises     400359855

¶580Educational

¶581 Zoological

¶582 Programs, Inc.     100    Plume Enterprises     400359855

¶583William Boever  *458    15,500    Galingale Llamas  ¹   400359863

¶584Robert Sabo        90    Plume Enterprises     400359855

¶585Sea World of Ohio    1,500    Plume Enterprises     400359855

¶586Sea World of Ohio    1,500    Plume Enterprises     400359855

¶587Sea World of Ohio    9,000    Plume Enterprises     400359855

¶588          _______

¶589 Total        74,360

¶590             1990 Royalty Income

¶591                           Deposited in

¶592   Payor       Amount      Payee        Account No.

¶593   _____       _______      _____       ____________

¶594Scavenger Oil Corp. $ 1,800    Plume Enterprises     400359855

¶595Pennzoil Products     257    Trundle Management

¶596*459  Eton Trust Co.,

¶597                 Ltd. Trustee  ¹    1163506106

¶598Pennzoil Products     289    Trundle Management

¶599                 Eton Trust Co.,

¶600                 Ltd. Trustee      1163506106

¶601Pennzoil Products     443    Trundle Management

¶602                 Eton Trust Co.,

¶603                 Ltd. Trustee      1163506106

¶604          ________

¶605 Total         2,789

¶606          ________

¶607  Total Income  ² 77,149

¶608               APPENDIX I

¶609             1991 Gross Receipts

¶610*460           Deposited in

¶611  Payor        Amount       Payee       Account No.

¶612  _____        ______       _____       ____________

¶613Robert Sabo       $ 600    Wendy Arbogast      400359855

¶614Robert Sabo        70    Plume Enterprises     400359855

¶615Robert Sabo        35    Plume Enterprises     400359855

¶616Fish and Feathers

¶617International      250    Plume Enterprises     400359855

¶618Robert Sabo       1,000    Plume Enterprises     400359855

¶619Robert Sabo        500    Plume Enterprises     400359855

¶620Educational

¶621 Zoological

¶622 Programs, Inc.     200    Plume Enterprises     400359855

¶623State of Ohio      1,000    Plume Enterprises     400359855

¶624Robert Sabo        35    Plume Enterprises     400359855

¶625Robert Sabo        123    Plume Enterprises     400359855

¶626Avian Farms       2,750    Plume Enterprises     400359855

¶627Mary Z. Reed       500    Plume Enterprises     400359855

¶628Avian*461 Farms        35    Plume Enterprises     400359855

¶629ITT Hartford       595    Plume Enterprises     400359855

¶630Robert Sabo        66    Plume Enterprises     400359855

¶631Avian Farms       1,000    Plume Enterprises     400359855

¶632Sea World of Ohio    1,800    Plume Enterprises     400359855

¶633Avian Farms       1,000    Plume Enterprises     400359855

¶634Mary Z. Reed      1,500    Plume Enterprises     400359855

¶635Sea World of Ohio    1,800    Plume Enterprises     400359855

¶636Sea World of Ohio    1,200    Plume Enterprises     400359855

¶637           ______

¶638 Total        16,059

¶639             1991 Royalty Income

¶640                            Deposited in

¶641   Payor       Amount       Payee       Account No.

¶642   _____       ______       ______       ____________

¶643Pennzoil Products    $ 249    Trundle Management

¶644*462  Eton Trust Co.,

¶645                 Ltd., Trustee  ¹    1163506106

¶646Pennzoil Products     209    Trundle Management

¶647                 Eton Trust Co.,

¶648                 Ltd., Trustee      1163506106

¶649Pennzoil Products     241    Trundle Management

¶650                 Eton Trust Co.,

¶651                 Ltd., Trustee      1163506106

¶652Pennzoil Products     337    Trundle Management

¶653                 Eton Trust Co.,

¶654                 Ltd., Trustee      1163506106

¶655Pennzoil Products     217    Trundle Management

¶656                 Eton Trust Co.,

¶657                 Ltd., Trustee      1163506106

¶658Pennzoil Products     578    Trundle Management

¶659                 Eton Trust Co.,

¶660                 Ltd., Trustee      1163506106

¶661Pennzoil Products   *463   369    Trundle Management

¶662                 Eton Trust Co.,

¶663                 Ltd., Trustee      1163506106

¶664           _______

¶665 Total         2,199

¶666           _______

¶667  Total Income  ² 18,258

¶668               APPENDIX J

¶669             1992 Gross Receipts

¶670                            Deposited in

¶671   Payor       Amount      Payee        Account No.

¶672   _____       ______      _____        ____________

¶673Educational

¶674 Zoological

¶675 Programs, Inc.    $ 100    Plume Enterprises     400359855

¶676Anheuser-Busch*464     2,000    Plume Enterprises     400359855

¶677Anheuser-Busch     2,700    Plume Enterprises     400359855

¶678Anheuser-Busch     1,400    Plume Enterprises     400359855

¶679Timothy L. Charles    500    Galingale Group      400359863

¶680Anheuser-Busch     1,400    Plume Enterprises     400359855

¶681Avian Farms        560    Galingale Group      400359863

¶682Avian Farms        350    Galingale Group      400359863

¶683Avian Farms        70    Plume Enterprises     400359855

¶684Anheuser-Busch     1,600    Plume Enterprises     23-043-10

¶685Anheuser-Busch     1,200    Plume Enterprises     23-043-10

¶686Anheuser-Busch     1,200    Plume Enterprises     23-043-10

¶687Anheuser-Busch     1,200    Plume Enterprises     23-043-10

¶688Anheuser-Busch     1,200    Plume Enterprises     23-043-10

¶689Anheuser-Busch     1,200    Plume Enterprises     23-043-10

¶690Anheuser-Busch     1,200    Plume Enterprises     23-043-10

¶691           ______

¶692 Total       *465  17,880

¶693             1992 Royalty Income

¶694                            Deposited in

¶695   Payor       Amount      Payee        Account No.

¶696   _____       ______      _____        ____________

¶697Pennzoil Products   $ 155    Trundle Management

¶698                 Eton Trust Co.,

¶699                 Ltd., Trustee  ¹    1163506106

¶700Pennzoil Products    281    Trundle Management

¶701                 Eton Trust Co.,

¶702                 Ltd., Trustee      1163506106

¶703Pennzoil Products    257    Trundle Management

¶704                 Eton Trust Co.,

¶705                 Ltd., Trustee      1163506106

¶706Pennzoil Products    332    Trundle Management

¶707                 Eton Trust Co.,

¶708                 Ltd., Trustee      1163506106

¶709Pennzoil*466 Products    745    Trundle Management

¶710                 Eton Trust Co.,

¶711                 Ltd., Trustee     1163506106

¶712Pennzoil Products    432    Trundle Management

¶713                 Eton Trust Co.,

¶714                  Ltd., Trustee     1163506106

¶715          ______

¶716Total         2,203

¶717  Total Income  ² 20,083