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The existence of fraud is a question of fact to be resolved
upon consideration of the entire record. DiLeo v. Commissioner, 96
T.C. 858, 874 (1991), affd. 959 F.2d 16 (2d Cir. 1992). Fraud is
never presumed but, rather, must be established by affirmative
evidence. Edelson v. Commissioner, 829 F.2d 828, 832-833 (9th Cir.
1987), affg. T.C. Memo. 1986-223. Direct evidence of the requisite
fraudulent intent is seldom available, but fraud may be proved by
circumstantial evidence. Spies v. United States, 317 U.S. 492, 499
(1943); Rowlee v. Commissioner, supra at 1123. The taxpayer's
entire course of conduct may establish the requisite intent.
Otsuki v. Commissioner, 53 T.C. 96, 105-106 (1969).
Over the years, courts have identified various factors from
which fraudulent intent can be inferred. These include: Failure
to file a return for several consecutive years; failure to report
substantial income; dealing in cash to avoid financial scrutiny;
filing a false Form W-4; and failure to cooperate with the taxing
authorities. Bradford v. Commissioner, 796 F.2d 303, 307-308 (9th
Cir. 1986), affg. T.C. Memo. 1984-601. These factors are present
in this case.
We observed petitioner at trial. He is an intelligent
individual who was continuously employed in a responsible position.
We are convinced that he was aware of his obligation to report his
income and file income tax returns, but he deliberately chose not
to do so. We recognize that failure to file a tax return itself
does not establish fraud, but combined with affirmative acts, it
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