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taxpayer's entire course of conduct may establish the requisite
fraudulent intent. Stone v. Commissioner, 56 T.C. 213, 223-224
(1971).
Petitioner, pursuant to section 7203, was convicted of
willfully failing to file his 1980 Federal income tax return.
While a taxpayer's failure to file a tax return does not,
standing alone, establish fraud, an inference of fraud is
justified when the failure to file is coupled with other badges
of fraud (i.e., circumstances that establish an intent to conceal
or mislead). Recklitis v. Commissioner, 91 T.C. 874, 910-911
(1988). These badges include filing false Forms W-4 and failing
to cooperate with tax authorities. Id. at 911-912; Rowlee v.
Commissioner, supra at 1124-1125.
In 1980, petitioner submitted Forms W-4E to his employers.
On these forms petitioner stated, under penalties of perjury,
that he incurred no income tax liability for 1979 and anticipated
no income tax liability for 1980. Petitioner incurred a 1979 tax
liability of $41,210 and during 1980 received wages of $182,352.
We find that petitioner knowingly submitted false Forms W-4E to
his employers. In addition, he encouraged Measurex to delay
respondent's investigation of his 1980 tax liability. These
facts, coupled with petitioner's willful failure to file his 1980
tax return, establish the requisite fraudulent intent.
Accordingly, we hold that petitioner is liable for the section
6653(b) addition to tax.
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