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knew that he had to file tax returns and pay taxes for 1985,
1986, and 1987; that he willfully failed to do so; and that he
intended to evade taxes by filing false withholding certificates.
Petitioner’s testimony that he believed that he did not have
to pay income tax during the years in issue is not credible
because he used a return preparer and filed returns before the
years in issue. Hebrank v. Commissioner, 81 T.C. 640, 642 (1983)
(taxpayer’s compliance in earlier years indicates knowledge of
the requirement to comply in later years).
Petitioner's situation is similar to that of the taxpayer in
Rowlee v. Commissioner, supra. The taxpayer in Rowlee was a high
school graduate and a wage earner who filed returns before the
years in issue, but not for the years in issue. His employers
did not withhold tax because he submitted Forms W-4 on which he
claimed either that he was exempt or that he was entitled to 10
withholding allowances.
We conclude that petitioner’s filing of false Forms W-4 is a
badge of fraud.
d. Failure To File Income Tax Returns
Failure to file income tax returns may be evidence of fraud,
particularly if the taxpayer submits false Forms W-4.2 Hebrank
2 Failure to file tax returns and use of false Forms W-4
have been held to be sufficient to establish criminal tax
evasion. See United States v. Parkinson, 602 F. Supp. 121, 123
(N.D. Ill. 1984), affd. without published opinion 774 F.2d 1168
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