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Fraud is never imputed or presumed. Beaver v. Commissioner,
55 T.C. 85, 92 (1970). Fraudulent intent may be established by
circumstantial evidence and reasonable inferences drawn from the
record, including facts deemed admitted under Rule 90(c).
Clayton v. Commissioner, 102 T.C. 632, 647 (1994); Coninck v.
Commissioner, 100 T.C. 495, 499 (1993); Marshall v. Commissioner,
85 T.C. at 272; Morrison v. Commissioner, 81 T.C. 644, 651-652
(1983); Alexander v. Commissioner, T.C. Memo. 1990-315. Indicia
of fraud include: Understating income, inadequate records,
failing to file tax returns, failing to cooperate with tax
authorities, and engaging in illegal activities. Bradford v.
Commissioner, 796 F.2d 303, 307-308 (9th Cir. 1986), affg. T.C.
Memo. 1984-601.
The losses petitioner claimed from the S-J partnerships, the
Real Estate partnerships, and his purported Schedule C mining
activities contributed to underpayments for the years 1975
through 1981. Petitioner admitted that his claim of partnership
losses from real estate, coal mining, movies, and diamond mining
ventures on each of his purported returns for the years 1975
through 1981 was fraudulent with the intent to evade taxes.
Petitioner further admitted that, with the intent to evade tax,
he fraudulently claimed $100,000 in losses from mining on his
1981 return, and $10 million on each of his 1979 and 1980
returns, as well as on the documents purporting to be returns for
the years 1977 and 1978.
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