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A taxpayer's failure to keep adequate records is a badge of
fraud. Bradford v. Commissioner, supra; Lollis v. Commissioner,
595 F.2d 1189, 1192 (9th Cir. 1979), affg. T.C. Memo. 1976-15.
Petitioner did not keep adequate records.
Implausible or inconsistent explanations of behavior by a
taxpayer can show that he or she had fraudulent intent. Bradford
v. Commissioner, supra at 307; Grosshandler v. Commissioner, 75
T.C. 1, 20 (1980). Petitioner's testimony was not credible.
Petitioner's claim that she was uninvolved and completely unaware
of the drug trafficking operation is implausible.
Engaging in illegal activities is evidence that the taxpayer
intends to evade tax. Bradford v. Commissioner, supra at 308;
see Patton v. Commissioner, supra (income from illegal activities
is a badge of fraud). Petitioner engaged in illegal drug
activities during the years in issue.
A taxpayer's failure to cooperate with the Commissioner's
examining agents is a badge of fraud. Bradford v. Commissioner,
supra. Petitioner did not cooperate with respondent's examining
agents. Instead, she removed several things from her home,
including a file cabinet containing financial records, before IRS
agents could execute a search warrant.
If a taxpayer conceals assets, it is evidence of fraud.
Bradford v. Commissioner, supra. Petitioner's home, automobile,
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