- 15 -
proof of fraud by clear and convincing evidence. Miller v.
Commissioner, 94 T.C. 316, 333 (1990); Recklitis v. Commissioner,
supra at 909-910.
Weighing and evaluating the objective evidence and
taxpayer's testimony in a fraud case can be difficult. Comparato
v. Commissioner, supra. To find fraud, we must infer intent
"in part from the objective evidence as to * * * [the taxpayers']
actions, which may be ambiguous, and in part from their own
testimony, which is almost by definition self-serving." Stone v.
Commissioner, 865 F.2d 342, 344 (D.C. Cir. 1989), revg. and
remanding Rosenbaum v. Commissioner, T.C. Memo. 1983-113.
While we are not obliged to accept the testimony of interested
parties, if it is not credible and not corroborated by the
evidence, Davis v. Commissioner, 88 T.C. 122, 140-141 (1987),
affd. 866 F.2d 852 (6th Cir. 1989), we find both Mark's and
Marla's testimony generally credible, strongly supported by the
rest of the record, and uncontroverted by respondent.
The courts have developed a nonexhaustive list of the
"badges of fraud", Bradford v. Commissioner, 796 F.2d 303, 307
(9th Cir. 1986), affg. T.C. Memo. 1984-601; Douge v.
Commissioner, 899 F.2d 164, 168 (2d Cir. 1990), affg. in part and
revg. in part an Oral Opinion of this Court; Miller v.
Commissioner, supra at 334 (list of badges of fraud is
nonexclusive), some of which respondent cited in her brief:
(1) Large and consistent understatements of tax; (2) failure to
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