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his wife. We find that the transfer of the personal residence to
petitioner's wife is evidence of fraud.
Most of the badges of fraud that are relied on by the Court
are present in this case. There is a pattern of failure to file
personal income tax returns, concealment of assets and income,
failure to cooperate with IRS agents, failure to keep records of
income-producing activities, destruction of tax records, dealing
in cash, and fraudulent transfer of assets. Respondent has
proven by clear and convincing evidence that petitioner’s failure
to file returns for taxable years 1990, 1991, and 1992 was
fraudulent.
Petitioner argues that he did not act fraudulently in
submitting the Forms 1040NR (U.S. Nonresident Alien Income Tax
Return) rather than a Form 1040 (U.S. Individual Tax Return)
because he disclosed his income of $65,000 to respondent in the
various documents that he submitted to the IRS. Petitioner
argues that the documents state the amounts of income stipulated
by the parties and refute that petitioner was concealing his
income from respondent. We do not think that these documents
preclude a finding of fraud in this case. Petitioner submitted
these documents to the IRS only after he was notified of the IRS
audit. Moreover, petitioner did not submit the second set of
Forms 1040NR and documents entitled "Statement in Lieu of Return"
until after the notice of deficiency was mailed to him.
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