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evidence that the failure to file was fraudulent. Sec. 7454(a);
Rule 142(b); Clayton v. Commissioner, 102 T.C. 632, 652-653 (1994).
Respondent's burden is met if it is shown that petitioner intended
to evade taxes known to be due and owing by conduct intended to
conceal, mislead, or otherwise prevent the collection of taxes, and
that there is an underpayment of tax. Stoltzfus v. United States,
398 F.2d 1002, 1004 (3d Cir. 1968); Rowlee v. Commissioner, 80 T.C.
1111, 1123 (1983); Acker v. Commissioner, 26 T.C. 107, 112 (1956).
Respondent cannot satisfy the burden of proving fraud simply by
piling inference upon inference.
The existence of fraud is a question of fact to be resolved
upon consideration of the entire record. DiLeo v. Commissioner, 96
T.C. at 874. Fraud is never presumed but, rather, must be
established by affirmative evidence. Edelson v. Commissioner, 829
F.2d 828, 832-833 (9th Cir. 1987), affg. T.C. Memo. 1986-223.
Direct evidence of the requisite fraudulent intent is seldom
available, but fraud may be proved by circumstantial evidence.
Spies v. United States, 317 U.S. 492, 499 (1943). The taxpayer's
entire course of conduct may establish the requisite intent. Stone
v. Commissioner, 56 T.C. 213, 223-224 (1971); Otsuki v.
Commissioner, 53 T.C. 96, 105-106 (1969).
Over the years, courts have identified various factors from
which fraudulent intent can be inferred. These include: (1)
Maintaining inadequate records; (2) failing to file tax returns;
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