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Rowlee v. Commissioner, supra at 1123. Courts have developed
various factors or “badges” which tend to establish fraud. Some
of the “badges of fraud” are: (1) Understating income, (2)
maintaining inadequate records, (3) failing to file tax returns,
(4) giving implausible or inconsistent explanations of behavior,
(5) concealing assets, (6) failing to cooperate with tax
authorities, (7) engaging in illegal activities, (8) attempting
to conceal activities, (9) dealing in cash, and (10) failing to
make estimated tax payments. See Bradford v. Commissioner, 796
F.2d 303, 307-308 (9th Cir. 1986), affg. T.C. Memo. 1984-601;
Clayton v. Commissioner, 102 T.C. 632, 647 (1994). We consider
this list nonexclusive, and we take into account all the unique
facts and circumstances of every case in determining whether
fraudulent intent exists.
After examination of some of the applicable factors above as
well as other factors in this case, we conclude respondent has
satisfied his burden of proving fraud. Petitioner is a former
Internal Revenue Service agent, which gives him insight into
audit techniques and the Service’s means of detecting inaccurate
returns. He has practiced as a return preparer and accountant
for over 20 years, and he is knowledgeable about tax law.
Petitioner put his knowledge and insight to use and tried to
disguise his income to underpay his taxes, and he tried to
circumvent detection of his deceit by the Service. In filing his
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