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(3) giving implausible or inconsistent explanations of behavior;
(4) concealing assets; (5) failing to cooperate with tax
authorities; (6) engaging in illegal activities; (7) attempting to
conceal illegal activities; (8) dealing in cash; and (9) failing to
make estimated tax payments. Recklitis v. Commissioner, 91 T.C.
874, 910 (1988). These "badges of fraud" are nonexclusive, and
none of them is dispositive in and of itself. Niedringhaus v.
Commissioner, 99 T.C. 202, 211 (1992). A taxpayer's
sophistication, education, and intelligence may be considered in
determining whether or not he had fraudulent intent. See Halle v.
Commissioner, 175 F.2d 500, 502 (2d Cir. 1949), affg. 7 T.C. 245
(1946); Niedringhaus v. Commissioner, supra; see also Wheadon v.
Commissioner, T.C. Memo. 1992-633.
Although there are several factors or "badges" existing in
this case which might indicate fraud, on balance, we believe that
respondent has not proven fraud by clear and convincing evidence.
We observed petitioner at trial. His testimony reflected that he
lacked financial sophistication and that he strongly believed that
his cattle-breeding operation did not generate sufficient net
income to require the filing of a tax return.
We do not sustain respondent's finding of fraud when we are
only left with a suspicion of fraud. Green v. Commissioner, 66
T.C. 538, 550 (1976); see Comparato v. Commissioner, T.C. Memo.
1993-52. In the instant case, we cannot conclude that petitioner
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