Maurice D. and Elinor Taylor - Page 21

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             conduct intended to conceal, mislead, or otherwise prevent the                                       
             collection of such taxes.  Rowlee v. Commissioner, 80 T.C. 1111,                                     
             1123 (1983).  Fraud can never be presumed.  Beaver v. Commissioner,                                  
             55 T.C. 85, 92 (1970).  Fraud may be proven by circumstantial                                        
             evidence, Stone v. Commissioner, 56 T.C. 213, 223-224 (1971), and                                    
             the Court may consider the taxpayer's entire course of conduct,                                      
             Rowlee v. Commissioner, supra at 1123.                                                               
                    To prove fraud, respondent relies primarily on petitioners'                                   
             failure to report the income from the grocery/convenience store                                      
             business, as well as the check-kiting scheme, on their original                                      
             delinquent returns or on amended returns.  Respondent asserts that:                                  
             (1) Petitioner did not file the delinquent returns with Revenue                                      
             Officer Scilipoti in order to hide the fact that no income was                                       
             reported from the grocery/convenience store business; (2)                                            
             petitioner had sufficient records from his calendar of daily gross                                   
             receipts and boxes of bills to calculate his net income from the                                     
             grocery/convenience store business; (3) petitioner knew from his                                     
             lifestyle that he had earned substantial profits from his                                            
             grocery/convenience store business; and (4) petitioner knew he had                                   
             income from his check-kiting scheme.                                                                 
                    Respondent's assertions are not supported by the evidence.                                    
             First, we find credible petitioner's belief that he had no profits                                   
             from the grocery/convenience store business and that his lack of                                     
             adequate books and records prevented him from establishing                                           

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