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From the entire record, we are convinced that the calendars
reflect petitioner's business receipts, as respondent has argued,
and we reject petitioner's improbable explanation.
Respondent's determination is corroborated by evidence of
petitioner's expenditures in excess of reported income.
Petitioner has not offered a credible explanation for many of his
expenditures described in the testimony and exhibits, such as the
$53,000 downpayment on the Eastridge Loop home.
The evidence is clear and convincing that petitioner
received income from Stardust and the models and that petitioner
did not report all of the income. Thus, respondent has proven an
understatement of income. Even in criminal cases, where the
Government bears the burden of proof beyond a reasonable doubt,
proof of unreported income is sufficient to establish an
underpayment of tax absent proof by the taxpayer of offsetting
expenses. See, e.g., Elwert v. United States, 231 F.2d 928, 933-
936 (9th Cir. 1956). A fortiori, that proof is sufficient in
this civil case. Although respondent has conceded that
petitioner is entitled to additional expenses for costs of labor,
those expenses are less than the unreported income. Petitioner's
testimony that he did not underreport his income is implausible
and not credible. Respondent has proven an understatement by
clear and convincing evidence.
Respondent must also prove fraudulent intent. Fraudulent
intent may be inferred from various kinds of circumstantial
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