-43-
nonexclusive. Miller v. Commissioner, supra at 334. The
taxpayer's background and the context of the events in question
may be considered as circumstantial evidence of fraud. United
States v. Murdock, 290 U.S. 389, 395 (1933); Spies v. United
States, supra at 497; Plunkett v. Commissioner, 465 F.2d 299, 303
(7th Cir. 1972), affg. T.C. Memo. 1970-274.
Respondent based a determination of fraud on the following
general indicia: (1) Petitioner's sophistication, (2) his
relationship with his return preparer, (3) his propensity to deal
in cash, (4) his conduct with respondent's agent, (5) his
credibility, (6) the "fraudulent" alimony deduction, and (7) a 5-
year pattern of underreported income.
Petitioner admits that he may have made errors in the
reporting of his income, but that errors were made for and
against his own interests. Further, petitioner paints himself as
an unsophisticated individual who relied on professionals for the
preparation of his tax returns. Although petitioner failed to
claim one substantial item which was beneficial to him, the
record otherwise reflects a pattern of understatement
attributable to unreported income, misrepresentation, and design.
Although petitioner was not specifically educated in
accounting and tax matters, he was a successful and effective
businessman involved in numerous real estate transactions and
complex business transactions. His mistrust of lawyers and
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