Jacob and Yehiella Kalo - Page 10

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                  Over the years, courts have developed a nonexclusive list of                            
            factors that demonstrate fraudulent intent.  These badges of                                  
            fraud include:  (1) Understating income, (2) maintaining                                      
            inadequate records, (3) failing to file tax returns, (4)                                      
            implausible or inconsistent explanations of behavior, (5)                                     
            concealment of income or assets, (6) failing to cooperate with                                
            tax authorities, (7) engaging in illegal activities, (8) an                                   
            intent to mislead which may be inferred from a pattern of                                     
            conduct, (9) lack of credibility of the taxpayer's testimony,                                 
            (10) filing false documents, and (11) dealing in cash.  See Spies                             
            v. United States, 317 U.S. 492, 499 (1943); Douge v.                                          
            Commissioner, 899 F.2d 164, 168 (2d Cir. 1990); Bradford v.                                   
            Commissioner, 796 F.2d 303, 307-308 (9th Cir. 1986), affg. T.C.                               
            Memo. 1984-601; Recklitis v. Commissioner, 91 T.C. 874, 910                                   
            (1988).  Although no single factor is necessarily sufficient to                               
            establish fraud, the combination of a number of factors                                       
            constitutes persuasive evidence.  Solomon v. Commissioner, 732                                
            F.2d 1459, 1461 (6th Cir. 1984), affg. per curiam T.C. Memo.                                  
            1982-603.  A taxpayer's intelligence, education, and tax                                      
            expertise are also relevant for purposes of determining                                       
            fraudulent intent.  See Stephenson v. Commissioner, 79 T.C. 995,                              
            1006 (1982), affd. 748 F.2d 331 (6th Cir. 1984); Iley v.                                      
            Commissioner, 19 T.C. 631, 635 (1952).  We note that some conduct                             
            and evidence can be classified under more than one factor.                                    






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