Bonito Ruiz Molinar - Page 12
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told Roberts that his books and records were in Mexico. Later,
he told Roberts that his books and records had been stolen.
d. Engaging in Illegal Activities
Engaging in illegal activities is evidence that the taxpayer
intends to evade tax. Bradford v. Commissioner, supra at 308;
see Patton v. Commissioner, supra (income from illegal activities
is a badge of fraud). Petitioner engaged in illegal drug
activities during the years in issue.
e. Failure to Cooperate With Tax Authorities
A taxpayer's failure to cooperate with the Commissioner's
examining agents is a badge of fraud. Bradford v. Commissioner,
supra. Petitioner did not cooperate with Roberts.
Respondent has proven by clear and convincing evidence that
petitioner is liable for the addition to tax and penalty for
fraud. We sustain respondent's determination except for the
concession for 1990, and hold that petitioner is liable for the
addition to tax for fraud under section 6653(b) for 1988 and the
penalty for fraud under section 6663 for 1989 and 1990 and that
all of the underpayments are due to fraud.
To reflect the foregoing and respondent's concession,
Decision will be
entered under Rule 155.
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