- 15 - (1990); Recklitis v. Commissioner, supra at 910; Castillo v. Commissioner, 84 T.C. 405, 409 (1985); Rowlee v. Commissioner, supra at 1125. In addition, the taxpayer's background and the context of the events in question may be considered circumstan- tial evidence of fraud. See Plunkett v. Commissioner, 465 F.2d 299, 303 (7th Cir. 1972), affg. T.C. Memo. 1970-274; Niedringhaus v. Commissioner, supra at 211. Although no single factor is necessarily sufficient to establish fraud, the existence of several indicia constitutes persuasive circumstantial evidence of fraud. See Bradford v. Commissioner, supra at 307; Petzoldt v. Commissioner, supra at 700. The record in this case is replete with indicia of fraud by petitioner. Prior to the years at issue, petitioner had a history of filing returns and paying taxes. He thus knew that he was required to file returns and pay taxes. Nonetheless, peti- tioner willfully did not file a return or report income for any of the years at issue, thereby establishing a pattern of sub- stantial and consistent understatement of income. We did not find petitioner's explanations of his behavior to be credible. On or about June 30, 1993, petitioner submitted to Biddle a false Form W-8 in which he claimed not to be a U.S. citizen and to be exempt from backup withholding rules.4 Except for estimated tax 4 Petitioner claims that Biddle hired petitioner as an independent contractor and that therefore there was no with- holding to be made by Biddle at the time in June 1993 when (continued...)Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
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