- 42 -
Petitioner's engaging in illegal drug activities is evidence
that he intended to evade tax. See Bradford v. Commissioner,
supra at 308; Patton v. Commissioner, supra.
Petitioner did not cooperate with respondent's examining
agents. Instead, petitioner refused to provide any of his
banking and corporate records and attempted to transfer his funds
from the Cayman Islands to other secret accounts in Panama. A
taxpayer's failure to cooperate with the Commissioner's examining
agents is a badge of fraud. See Bradford v. Commissioner, supra.
Concealing assets is evidence of fraud. See id.
Petitioner's home, automobile, and various other assets were held
by corporations in order to conceal ownership.
Extensive dealing in large amounts of cash, as petitioner
did, also constitutes evidence of fraud. See Estate of Mazzoni
v. Commissioner, supra.
We conclude that the record contains clear and convincing
evidence of petitioner's intent to conceal, mislead, or otherwise
prevent the collection of taxes on the unreported income for the
years in issue. We hold that the understatements of tax
attributable to the unreported income were due to fraud.
Accordingly, we sustain respondent's determination that
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