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Fraudulent intent may be inferred from various "badges of
fraud," including understatement of income, implausible or
inconsistent explanations of behavior, concealing assets, and
failure to cooperate with tax authorities. See Bradford v.
Commissioner, 796 F.2d 303, 307 (9th Cir. 1986), affg. T.C. Memo.
1984-601; Webb v. Commissioner, supra at 379; Marcus v.
Commissioner, 70 T.C. 562, 577 (1978), affd. without published
opinion 621 F.2d 439 (5th Cir. 1980). A taxpayer's
sophistication, education, and intelligence may be considered in
determining whether or not he or she had fraudulent intent.
Halle v. Commissioner, 175 F.2d 500, 503 (2d Cir. 1949), affg. 7
T.C. 245 (1946); Niedringhaus v. Commissioner, 99 T.C. 202, 211
(1992). The taxpayer's evasiveness on the stand, inconsistencies
in his or her testimony, and the lack of credibility of such
testimony are factors in considering the fraud issue. Bradford
v. Commissioner, supra; Toussaint v. Commissioner, 743 F.2d 309,
312 (5th Cir. 1984), affg. T.C. Memo. 1984-25.
Following a careful review of the record, we conclude that
respondent has failed to satisfy her burden with respect to this
issue. Although respondent has clearly and convincingly
established that an underpayment exists with respect to each
taxable year at issue, she has not clearly and convincingly
established that a portion of any such underpayment was due to
petitioner's fraud. The four indicia of fraud cited by
respondent do little more than suggest that petitioner may have
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