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petitioner filed amended returns after the due date showing
additional tax of $24,917 and $6,551 for 1984 and 1986,
respectively. Thus, petitioner has underpayments of tax within
the meaning of section 6653(c) for the years in question. As of
the time of trial, petitioner had not paid the additional taxes
shown on his amended returns for 1984 and 1986.
If any portion of an underpayment is due to fraud, then
petitioner is liable for a section 6653(b) addition. The
existence of fraud is a question of fact to be resolved upon
consideration of the entire record. Gajewski v. Commissioner, 67
T.C. 181, 199 (1976), affd. without published opinion 578 F.2d
1383 (8th Cir. 1978). Fraud may never be presumed; it must be
established by independent evidence demonstrating the taxpayer’s
fraudulent intent. Otsuki v. Commissioner, 53 T.C. 96, 106
(1969). Because direct proof of a taxpayer's intent is rarely
available, fraud may be proved by circumstantial evidence, and
reasonable inferences may be drawn from the facts in evidence.
Spies v. United States, 317 U.S. 492, 499 (1943).
The courts have developed a nonexhaustive list of
indications of fraudulent intent. These indications include:
(1) Understating income, (2) maintaining inadequate records, (3)
failing to file tax returns, (4) implausible or inconsistent
explanations of behavior, (5) concealment of income or assets,
(6) failing to cooperate with tax authorities, (7) engaging in or
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