- 14 -
T.C. 181, 199 (1976), affd. without published opinion 578 F.2d
1383 (8th Cir. 1978). Fraud is never presumed or imputed and
should not be found in circumstances which create at most only
suspicion. See Toussaint v. Commissioner, 743 F.2d 309, 312 (5th
Cir. 1984), affg. T.C. Memo. 1984-25; Petzoldt v. Commissioner,
92 T.C. 661, 700 (1989); Katz v. Commissioner, 90 T.C. 1130, 1144
(1988). Direct evidence of the requisite fraudulent intent is
seldom available. See Petzoldt v. Commissioner, supra at 699;
Rowlee v. Commissioner, 80 T.C. 1111, 1123 (1983). Consequently,
respondent may prove fraud by circumstantial evidence. See
Toussaint v. Commissioner, supra at 312; Marsellus v. Commis-
sioner, 544 F.2d 883, 885 (5th Cir. 1977), affg. T.C. Memo. 1975-
368; Rowlee v. Commissioner, supra at 1123.
The courts have identified a number of badges of fraud from
which fraudulent intent may be inferred. Those badges include
(1) consistent and substantial understatement of income,
(2) failure to file a return, (3) lack of credibility of the
taxpayer's testimony, (4) dealing in cash, (5) concealing assets,
and (6) failing to cooperate with respondent's representatives.
See Laurins v. Commissioner, supra at 913; Bradford v.
Commissioner, 796 F.2d 303, 307-308 (9th Cir. 1986), affg. T.C.
Memo. 1984-601; Ruark v. Commissioner, 449 F.2d 311, 312-313 (9th
Cir. 1971), affg. per curiam T.C. Memo. 1969-48; Niedringhaus v.
Commissioner, 99 T.C. 202, 211 (1992); Parks v. Commissioner,
supra at 664-665; Miller v. Commissioner, 94 T.C. 316, 334
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