- 44 - evade tax known or believed to be owing by conduct intended to conceal, mislead, or otherwise prevent the collection of taxes. See Korecky v. Commissioner, 781 F.2d 1566, 1568 (11th Cir. 1986), affg. T.C. Memo. 1985-63. Fraud is never presumed but must be proved by clear and convincing evidence. See Petzoldt v. Commissioner, supra at 699. Because direct proof of a taxpayer’s intent is rarely available, however, fraudulent intent may be established by various kinds of circumstantial evidence, or “badges of fraud”, including consistent, material understatements of income; the filing of false statements or documents; failure to maintain complete and accurate records; the concealing of assets or covering up sources of income; failure to cooperate fully with the Internal Revenue Service; implausible or inconsistent explanations of behavior; illegal activity; and attempted concealment thereof. See Spies v. United States, 317 U.S. 492, 499 (1943); Bradford v. Commissioner, 796 F.2d 303, 307 (9th Cir. 1986), affg. T.C. Memo. 1984-601; Korecky v. Commissioner, supra at 1568; Stephenson v. Commissioner, 79 T.C. 995, 1005-1006 (1982), affd. 748 F.2d 331 (6th Cir. 1984). The Gas Rebate Payments Petitioners’ consistent and substantial omission of the gas rebate payments from gross income over 3 years is persuasivePage: Previous 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 Next
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