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Furthermore, petitioner is deemed to have admitted that his
failure to produce records "was fraudulent with the intent to
evade the payment of taxes".
Third, failing to file tax returns is evidence of fraud.
"[T]he mere failure to file tax returns, even over an extended
period of time, does not per se establish fraud * * * however,
the failure to file tax returns is persuasive circumstantial
evidence of fraud." Marsellus v. Commissioner, 544 F.2d 883
(5th Cir. 1977), affg. T.C. Memo. 1975-368. Petitioner is deemed
to have admitted that he failed to file Federal income tax
returns for 1987 through 1989. In addition, petitioner's prior
filings of joint income tax returns for 1983 through 1986
indicate petitioner's knowledge of the yearly requirement to file
and further support a finding that petitioner possessed
fraudulent intent in failing to file returns for the years in
issue.
In conclusion, petitioner's deemed admissions support a
finding of fraud. Respondent has established by clear and
convincing evidence that petitioner acted fraudulently in failing
to file returns and report income for 1987 through 1989.
An appropriate order
will be issued and decision
will be entered.
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