- 25 -
The existence of fraud is a question of fact to be resolved
upon consideration of the entire record. DiLeo v. Commissioner,
96 T.C. 858, 874 (1991), affd. 959 F.2d 16 (2d Cir. 1992); Estate
of Pittard v. Commissioner, 69 T.C. 391 (1977). Fraud is never
presumed and must be established by affirmative evidence of
fraudulent intent. Edelson v. Commissioner, 829 F.2d 828, 833
(9th Cir. 1987), affg. T.C. Memo. 1986-223; Beaver v.
Commissioner, 55 T.C. 85, 92 (1970). Fraud may be proven by
circumstantial evidence because direct proof of the taxpayer’s
intent is seldom available. Spies v. United States, 317 U.S. 492
(1943); Rowlee v. Commissioner, supra. Courts have developed a
nonexclusive list of factors that establish fraudulent intent:
(1) Understatement of income; (2) inadequate records; (3)
implausible or inconsistent explanations of behavior; (4)
concealment of assets; (5) failure to file tax returns; (6)
filing false documents; (7) failure to cooperate with tax
authorities; (8) dealing in cash; and (9) engaging in illegal
activity. Bradford v. Commissioner, 796 F.2d 303, 307-308 (9th
Cir. 1986), affg. T.C. Memo. 1984-601; Miller v. Commissioner, 94
T.C. 316, 334 (1990); Recklitis v. Commissioner, 91 T.C. 874, 910
(1988). A taxpayer’s intelligence, education, and experience are
relevant in determining fraudulent intent. Niedringhaus v.
Commissioner, 99 T.C. 202, 211 (1992).
Page: Previous 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NextLast modified: May 25, 2011