Hugh Wilkinson and Evelyn Wilkinson - Page 13

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               Respondent presented evidence on the presence of several                
          indicia of fraud.  Among other things, respondent claims that the            
          following indicia clearly and convincingly establish fraud:                  
          Dr. Wilkinson's conviction under section 7203; petitioners'                  
          understatement of income; petitioners' failure to make estimated             
          tax payments; petitioners' failure to file tax returns; and                  
          petitioners' failure to cooperate with tax authorities.                      
               First, respondent argues that Dr. Wilkinson's conviction for            
          violating section 7203 is evidence of fraud.  Citing Castillo v.             
          Commissioner, supra at 409-410, respondent also argues that                  
          Dr. Wilkinson is collaterally estopped from denying that he                  
          willfully failed to file his 1988 return.  It is well settled                
          that a taxpayer's conviction under section 7203 for a given year             
          conclusively establishes the willfulness of that taxpayer's                  
          failure to file returns.  Id.  However, willful failure to file,             
          even over an extended period of time, does not conclusively                  
          establish the fraudulent intent required under sections 6653(b)              
          and 6651(f).  Grosshandler v. Commissioner, 75  T.C. 1, 19                   
          (1980); see also Sarcone v. Commissioner, T.C. Memo. 1985-548.               
          An intent to evade taxes is not an element of section 7203; that             
          section may be violated by the willful failure to pay a tax, file            
          a return, maintain records, or supply information.  Although                 
          Dr. Wilkinson's conviction under section 7203 collaterally estops            
          him from denying that he willfully failed to file his 1988                   
          return, it does not bar him from arguing that his failure was                

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