- 59 -
with the specific purpose of evading a tax believed to be owing.
Conforte v. Commissioner, 692 F.2d 587, 592 (9th Cir. 1982),
affg. in part, revg. in part on other grounds 74 T.C. 1160
(1980); Miller v. Commissioner, 94 T.C. 316, 332 (1990); Petzoldt
v. Commissioner, 92 T.C. 661, 698 (1989). A fraudulent intent is
present if the estate filed a return intending to conceal,
mislead, or otherwise prevent the collection of tax. See Spies
v. United States, 317 U.S. 492, 499 (1943); Akland v.
Commissioner, 767 F.2d 618, 621 (9th Cir. 1985), affg. T.C. Memo.
1983-249; Rowlee v. Commissioner, 80 T.C. 1111, 1123 (1983).
With respect to the first prong, the estate concedes that it
failed to report certain assets and undervalued other assets.
The estate also concedes that the nonreporting of these assets
generated an underpayment of Federal estate tax. We hold that
respondent has met the first prong in that the record shows
clearly and convincingly that the estate underpaid its tax
liability.13
Turning to the second prong, a fraudulent intent may be
proven by circumstantial evidence because direct proof of a
taxpayer's intent is rarely available. Reasonable inferences may
be drawn from the relevant facts. Spies v. United States, supra
at 499; Akland v. Commissioner, supra at 621; Stephenson v.
13 Our disallowance of Ms. Trompeter's claim also generates
an underpayment.
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