- 41 -
fraud. Furthermore, petitioner has not established that any
portions of the underpayments are not attributable to fraud.
A pattern of consistent underreporting of income for several
years, especially when accompanied by other circumstances showing
intent to conceal, such as illegal narcotics trafficking, is
strong evidence of fraud. See Holland v. United States, 348 U.S.
121 (1954); Patton v. Commissioner, 799 F.2d 166, 171 (5th Cir.
1986), affg. T.C. Memo. 1985-148; Estate of Mazzoni v.
Commissioner, supra; Anderson v. Commissioner, 250 F.2d 242, 250
(5th Cir. 1957), affg. on this issue and remanding T.C. Memo.
1956-178. Petitioner consistently underreported his income.
Petitioner failed to keep adequate records, a badge of
fraud. See Bradford v. Commissioner, supra; Lollis v.
Commissioner, 595 F.2d 1189, 1192 (9th Cir. 1979), affg. T.C.
Memo. 1976-15.
Petitioner's testimony was not credible. Petitioner's claim
that he had a good faith belief that his 1980 plea agreement gave
him prospective civil tax immunity is unpersuasive. Petitioner
was convicted of criminal tax evasion for 1981, a year that
postdated his plea agreement. It may be inferred that the jury
found that his violation of the reporting requirements of the
Code for that year was willful. Cf. United States v. Harvey, 869
F.2d at 1449 n.15.
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