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Commissioner, 79 T.C. 995, 1006 (1982), affd. 748 F.2d 331 (6th
Cir. 1984). A taxpayer's entire course of conduct can be
indicative of fraud. Stone v. Commissioner, 56 T.C. 213, 223-224
(1971); Otsuki v. Commissioner, 53 T.C. 96, 105-106 (1969). The
sophistication, education, and intelligence of the taxpayer are
relevant to determining fraudulent intent. See Niedringhaus v.
Commissioner, 99 T.C. 202, 211 (1992); Stephenson v.
Commissioner, supra at 1006; Iley v. Commissioner, 19 T.C. 631,
635 (1952).
Over the years, courts have developed a nonexclusive list of
factors that demonstrate fraudulent intent. These badges of
fraud include: (1) Understating income, (2) maintaining
inadequate records, (3) implausible or inconsistent explanations
of behavior, (4) concealment of income or assets, (5) failing to
cooperate with tax authorities, (6) engaging in illegal
activities, (7) an intent to mislead which may be inferred from a
pattern of conduct, (8) lack of credibility of the taxpayer's
testimony, (9) filing false documents, (10) failing to file tax
returns, and (11) dealing in cash. See Spies v. United States,
supra at 499; Douge v. Commissioner, 899 F.2d 164, 168 (2d Cir.
1990); Bradford v. Commissioner, 796 F.2d 303, 307-308 (9th Cir.
1986), affg. T.C. Memo. 1984-601; Recklitis v. Commissioner, 91
T.C. 874, 910 (1988). Although no single factor is necessarily
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