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prevent the collection of taxes. Stoltzfus v. United States,
supra at 1004; Webb v. Commissioner, 394 F.2d 366, 377 (5th Cir.
1968), affg. T.C. Memo. 1966-81; Rowlee v. Commissioner, supra at
1123. Because direct proof of a taxpayer's intent is rarely
available, fraud may be proven by circumstantial evidence and
reasonable inferences may be drawn from the relevant facts.
Spies v. United States, supra at 499; Stephenson v. Commissioner,
79 T.C. 995, 1006 (1982), affd. 748 F.2d 331 (6th Cir. 1984);
Collins v. Commissioner, T.C. Memo. 1994-409.
Courts have relied on a number of indicia of fraud in
deciding section 6653(b) and section 6651(f) cases. Indicia of
fraud include: (1) Understating income; (2) maintaining
inadequate records; (3) failing to file tax returns; (4) giving
implausible or inconsistent explanations of behavior; (5)
concealing assets; (6) failing to cooperate with tax 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). These "badges of fraud" are nonexclusive.
Niedringhaus v. Commissioner, 99 T.C. 202, 211 (1992). The
taxpayer's education and business background are also relevant to
the determination of fraud. See Wheadon v. Commissioner, T.C.
Memo. 1992-633. We turn to the indicia of fraud that are
relevant to the instant case.
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