- 65 -
evidence and reasonable inferences drawn from such evidence.
Estate of Mazzoni v. Commissioner, supra at 202 (citing Webb v.
Commissioner, 394 F.2d 366, 380 (5th Cir. 1968), affg. T.C. Memo.
1966-81); Cochrane v. Commissioner, supra at 28. The taxpayer's
entire course of conduct may establish the requisite fraudulent
intent. Bagby v. Commissioner, 102 T.C. 596, 609 (1994).
Circumstances which this Court and others have considered as
indicative of fraud include: Understatement of income,
inadequate records, implausible or inconsistent explanations of
behavior, concealment of assets, failure to cooperate with the
tax authorities, dealing in cash, engaging in illegal activity,
and attempting to conceal illegal activity. Estate of Mazzoni v.
Commissioner, supra; Niedringhaus v. Commissioner, 99 T.C. 202,
211 (1992) (citing Bradford v. Commissioner, 796 F.2d 303, 307
(9th Cir. 1986), affg. T.C. Memo. 1984-601).
Wilson, Cattalo, and Grove understated their income for both
1982 and 1983. In addition to the convictions for filing false
returns, they were found guilty of robbery or bribery committed
during both years in issue, and Wilson and Cattalo of perjury for
their testimony regarding the 1981 and 1983 Roeder searches and
the 1983 Carr search. Cattalo and Grove were convicted of
possession of drugs with intent to distribute (1982 and 1983) and
did receive the proceeds of the sale of drugs. Petitioners
attempted to conceal such activities in various ways including:
Filing or signing false investigation reports and property
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