Kenneth A. Weiner - Page 13

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          inadequate books and records, (3) failing to file tax returns,              
          (4) giving implausible or inconsistent explanations of behavior,            
          (5) concealing assets, (6) failing to cooperate with taxing                 
          authorities, (7) engaging in illegal activities, (8) attempting             
          to conceal illegal activities, (9) dealing in cash, and (10)                
          failing to make estimated tax payments.  Recklitis v.                       
          Commissioner, 91 T.C. 874, 910 (1988).  Although no single factor           
          is necessarily dispositive on the issue of fraud, the existence             
          of several indicia is persuasive circumstantial evidence.                   
          Petzoldt v. Commissioner, supra at 700.  We proceed by addressing           
          the indicia of fraud that are relevant to the case at hand.                 
               Respondent has affirmatively shown various indicia of fraud            
          committed by petitioner.  First, petitioner's understatement of             
          income in 1984 and 1985 indicates fraud.  Through the deemed                
          admitted facts, respondent has established that over a 2-year               
          period petitioner engaged in a pattern of concealing substantial            
          amounts of income.  Petitioner received substantial income from             
          his involvement in the investment scheme in 1984 and 1985 which             
          he failed to report on his 1984 and 1985 Federal income tax                 
          returns.  This is strong evidence of an intent to evade tax.                
          Merritt v. Commissioner, 301 F.2d 484, 487 (5th Cir. 1962), affg.           
          T.C. Memo. 1959-172.                                                        
               Second, the handling of one's affairs in such a way as to              
          avoid making records usual in transactions, the concealment of              

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