- 85 -
Plunkett v. Commissioner, 465 F.2d at 303; Mensik v.
Commissioner, 328 F.2d 147, 150 (7th Cir. 1964), affg. 37 T.C.
703 (1962); Stone v. Commissioner, 56 T.C. at 224.
In order to establish fraud, respondent must show that
petitioner intended to evade taxes, which petitioner knew or
believed he owed, by conduct intended to conceal, mislead, or
otherwise prevent the collection of taxes. E.g., Webb v.
Commissioner, 394 F.2d 366, 377 (5th Cir. 1968), affg. T.C. Memo.
1966-81; Powell v. Granquist, 252 F.2d 56, 60 (9th Cir. 1958);
Danenberg v. Commissioner, 73 T.C. 370, 393 (1979); McGee v.
Commissioner, 61 T.C. 249, 256-257 (1973), affd. 519 F.2d 1121
(5th Cir. 1975). This intent may be inferred from circumstantial
evidence, Powell v. Granquist, 252 F.2d at 61; Gajewski v.
Commissioner, 67 T.C. 181, 200 (1976), affd. without published
opinion 578 F.2d 1383 (8th Cir. 1978), including the
implausibility of petitioner’s explanations, Bradford v.
Commissioner, 796 F.2d 303, 307 (9th Cir. 1986), and cases there
cited, affg. T.C. Memo. 1984-601; Boyett v. Commissioner, 204
F.2d 205, 208 (5th Cir. 1953), affg. a Memorandum Opinion of this
Court dated Mar. 14, 1951.
We consider first whether petitioner has an underpayment of
tax for any of the statute of limitations years, and then we
consider whether any part of that underpayment is due to fraud.
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