- 27 -
sufficient to establish fraud, the combination of a number of
factors constitutes persuasive evidence. Solomon v.
Commissioner, 732 F.2d 1459, 1461 (6th Cir. 1984), affg. per
curiam T.C. Memo. 1982-603. We note that some conduct and
evidence can be classified under more than one factor.
1. Petitioner's Sophistication and Experience
Petitioner is a medical doctor. We shall not hold
petitioner to either a high or low standard while evaluating his
actions.
2. Consistent and Substantial Understatements of
Income
The mere failure to report income is not sufficient to
establish fraud. Merritt v. Commissioner, 301 F.2d 484, 487 (5th
Cir. 1962), affg. T.C. Memo. 1959-172. Consistent and
substantial understatements of income, however, may be strong
evidence of fraud when coupled with other circumstances. Marcus
v. Commissioner, 70 T.C. 562, 577 (1978), affd. without published
opinion 621 F.2d 439 (5th Cir. 1980). A pattern of consistent
underreporting of income, when accompanied by other circumstances
indicating an intent to conceal income, may justify the inference
of fraud. Holland v. United States, 348 U.S. at 139.
Petitioner's understatements during the years in issue are
consistent and substantial; they are evidence of fraud.
3. Failure To Maintain Adequate Books and Records
Page: Previous 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 NextLast modified: May 25, 2011