- 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...)
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