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v. United States, 317 U.S. 492, 498 (1943); Stephenson v.
Commissioner, 79 T.C. 995, 1005 (1982), affd. 748 F.2d 331 (6th
Cir. 1984). The taxpayer's entire course of conduct may
establish the requisite fraudulent intent. Stone v.
Commissioner, 56 T.C. 213, 223-224 (1971). The mere existence of
deficiencies in tax liability does not show fraud. Otsuki v.
Commissioner, supra at 106. Exceedingly large discrepancies
between a taxpayer's actual income and reported income, however,
do constitute evidence of fraud when such discrepancies are
unexplained. Stone v. Commissioner, supra at 224.
Petitioner reported gross income of $25,250.85 for 1984 and
$24,615.67 for 1985. Respondent determined that petitioner
actually had gross income of $199,713.04 for 1984 and $119,990.50
for 1985. The only explanation furnished by petitioner for these
large discrepancies was that he had accumulated $210,000.
Petitioner, however, failed to present any credible evidence
establishing the existence of the accumulated cash. Moreover,
even if the $210,000 existed, petitioner testified that he
invested all of it before the years in issue. Therefore,
petitioner's explanation for the discrepancies is unpersuasive.
We conclude that the record provides sufficient evidence of
petitioner's fraudulent intent to evade taxes for 1984 and 1985.
Accordingly, for 1984 and 1985, we hold that petitioner,
pursuant to section 6653(b)(1) and (2), is liable for additions
to tax for fraud. We conclude, however, that the portion of the
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