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record. Rowlee v. Commissioner, 80 T.C. 1111, 1123 (1983); Hicks
Co. v. Commissioner, 56 T.C. 982, 1019 (1971), affd. 470 F.2d 87
(1st Cir. 1972). Fraudulent intent may be inferred from
circumstantial evidence, such as proof of conduct the likely
effect of which is to mislead or conceal. Spies v. United
States, 317 U.S. 492, 499-500 (1943); Foster v. Commissioner, 391
F.2d 727, 733 (4th Cir. 1968), affg. in part, revg. and remanding
in part T.C. Memo. 1965-246; Stephenson v. Commissioner, 79 T.C.
at 1006.
Courts frequently list various factors or "badges of fraud"
from which fraudulent intent may be inferred. Although such
lists are nonexclusive, some of the factors this Court has
considered indicative of fraud are (1) understatement of income,
(2) inadequate records, (3) failure to file tax returns, (4)
implausible or inconsistent explanations of behavior, (5)
concealment of assets, (6) failure to cooperate with the tax
authorities, (7) filing false Forms W-4, (8) failure to make
estimated tax payments, (9) dealing in cash, (10) engaging in
illegal activity, and (11) attempting to conceal illegal
activity. Niedringhaus v. Commissioner, 99 T.C. 202, 211 (1992)
(citing Bradford v. Commissioner, 796 F.2d 303, 307-308 (9th Cir.
1986), affg. T.C. Memo. 1984-601).
Petitioner has understated his income. Although petitioner
presented Caplan with a list of some of the missing cars during
the inventory, he has not presented any evidence to show he kept
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