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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 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. We note that some conduct and evidence can be
classified under more than one factor. The sophistication,
education, and intelligence of the taxpayer are relevant to this
determination. Niedringhaus v. Commissioner, 99 T.C. 202, 211
(1992).
a. Petitioners' Sophistication and Experience
Mr. McGirl attempts to counter evidence of fraud with the
defense that he had no accounting or bookkeeping training and was
ignorant as to all recordkeeping and tax reporting requirements.
We are not impressed with Mr. McGirl's attempt to characterize
himself as an inexperienced and unknowledgeable business person.
Mr. McGirl has a college education. He operated a restaurant
before petitioners started the Yogurt Station. The record shows
that he managed to accumulate more than $112,000 in savings in
just 3 years of the Yogurt Station's operation. Even if we were
to believe in Mr. McGirl's naivete, which we do not, the record
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