-29-
return); Bagby v. Commissioner, 102 T.C. 596 (1994) (taxpayer's
use in 1991 of forged tax returns and altered checks is relevant
evidence of taxpayer's fraudulent intent for tax years 1985-87,
where taxpayer had not filed returns for those years).
We also agree with petitioner that under rule 404(a) and (b)
of the Federal Rules of Evidence, evidence of petitioner's "other
acts" in 1994-95 may not be admitted to prove petitioner's
"character" in order to show that petitioner acted in conformity
therewith in failing to file returns for 1989-92. However, rule
404(b) of the Federal Rules of Evidence expressly provides that
"other acts" evidence may be admitted to show knowledge, intent,
or the absence of accident or mistake.
The Court of Appeals for the Ninth Circuit--to which an
appeal of this case would lie--construes rule 404(b) of the
Federal Rules of Evidence as a "rule of inclusion"; "other acts"
evidence is admissible under rule 404(b), unless it tends to
prove only propensity or disposition. See United States v.
Ayers, 924 F.2d 1468, 1472-1473 (9th Cir. 1991). The Court of
Appeals applies the following four-part test to determine the
admissibility of "other acts" evidence:
1. sufficient evidence must exist for the trier of fact to
find that the party committed the other acts;
2. the other acts must be introduced to prove a material
issue in the case;
3. the other acts must not be too remote in time; and
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