The famous eleven (count ’em, eleven) badges of fraud get a workout in Dawn Chappelle Cottman, T. C. Memo. 2026-88, filed 9/17/26, since her fall in USDCDMD for 14 (count ’em, 14) counts of filing false returns and other delictions didn’t estop her contesting the Section 6663(a) fraud SOL extender. Her Section 7206(1) fall doesn’t establish fraudulent intent, only intent, and her 18 USC §286 conspiracy fall has never been considered by Tax Court as establishing tax fraud and wasn’t briefed by the parties here.  

So Dawn loses seven of eleven badges, and I’ll spare you the details.

Two are neutral: failure to cooperate because Dawn was in the slammer when IRS asked for documents (even though after she was out she clammed up). And her testimony, though it strained, it did not break, her credibility, as it squared with her trial position and confirmed IRS’ bank deposits analysis.

But the two I want to stress are the two that she won. Dawn did file returns, true or not, for the years at issue; filing returns count. And Dawn’s explanations and litigation conduct have been consistent and not incredible.  “Although this Court finds that certain aspects of petitioner’s story lack credibility, there have been no major inconsistencies in petitioner’s legal arguments or factual allegations.” T. C. Memo. 2026-88, at p. 13.

Judge Kashi (“My or the High”) Way unpacks a lot of issue preclusion and Federal criminal law here.