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of income tax may establish the requisite fraudulent intent. See
Rowlee v. Commissioner, 80 T.C. 1111, 1123 (1983).
Respondent has established that, for each year in issue,
petitioners' underpayment of tax was attributable to Mr.
Drozdowski's fraud. Each of petitioners' amended returns is an
admission of a tax underpayment. See Badaracco v. Commissioner,
464 U.S. 386, 399 (1984). In addition, Mr. Drozdowski's actions
warrant an inference of fraud. Mr. Drozdowski knew that his
wages from CPC were subject to income tax, yet he requested that
CPC not withhold taxes from, and intentionally failed to report,
such wages. As a result, he underreported substantial amounts of
income relating to each year in issue. See Holland v. United
States, 348 U.S. 121, 139 (1954) (holding that a pattern of
consistently and substantially underreporting income may justify
an inference of fraud); Otsuki v. Commissioner, 53 T.C. 96, 109
(1969) (holding that underreporting income, coupled with other
circumstances showing an intent to conceal, justifies an
inference of fraud). Accordingly, we hold that Mr. Drozdowski is
liable for the additions to tax, and penalties, for fraud.
Contentions we have not addressed are irrelevant, moot, or
meritless.
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