S. Robert Davis - Page 25




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          satisfy the burden of proof, the Commissioner must show:  (1) An            
          underpayment exists; and (2) the taxpayer intended to evade taxes           
          known to be owing by conduct intended to conceal, mislead, or               
          otherwise prevent the collection of taxes.  See Parks v.                    
          Commissioner, 94 T.C. 654, 660-661 (1990).  The Commissioner must           
          meet this burden through affirmative evidence because fraud is              
          never imputed or presumed.  See Beaver v. Commissioner, 55 T.C.             
          85, 92 (1970).                                                              
               A.   Fraudulent Intent                                                 
               The Commissioner must prove that a portion of the                      
          underpayment for each taxable year in issue was due to fraud.               
          See Professional Servs. v. Commissioner, 79 T.C. 888, 930 (1982).           
          The existence of fraud is a question of fact to be resolved from            
          the entire record.  See Gajewski v. Commissioner, 67 T.C. 181,              
          199 (1976), affd. without published opinion 578 F.2d 1383 (8th              
          Cir. 1978).  Because direct proof of a taxpayer's intent is                 
          rarely available, fraud may be proven by circumstantial evidence,           
          and reasonable inferences may be drawn from the relevant facts.             
          See Spies v. United States, 317 U.S. 492, 499 (1943); Stephenson            
          v. Commissioner, 79 T.C. 995, 1006 (1982), affd. 748 F.2d 331               
          (6th Cir. 1984).  A taxpayer's entire course of conduct can be              
          indicative of fraud.  See Stone v. Commissioner, 56 T.C. 213,               
          223-224 (1971); Otsuki v. Commissioner, 53 T.C. 96, 105-106                 
          (1969).  The sophistication, education, and intelligence of the             





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