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959 F.2d 16 (2d Cir. 1992), affg. 96 T.C. 858, 873 (1991).
Respondent has the burden of proving fraud by clear and
convincing evidence. See sec. 7454(a); Rule 142(b); Bagby v.
Commissioner, 102 T.C. 596, 607 (1994).
Indicia of fraud include: (1) Understatements of income;
(2) inadequate books and records; (3) failure to file tax
returns; (4) implausible or inconsistent explanations; and
(5) lack of cooperation with tax authorities. 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); Petzoldt v. Commissioner, 92 T.C. 661, 699-700 (1989);
Recklitis v. Commissioner, 91 T.C. 874, 910 (1988).
Petitioner has not alleged any nontaxable sources of
income, and the roofing business constitutes the likely taxable
source of the deposits into the checking account.
With regard to fraudulent intent, the evidence establishes
for each year in issue that petitioner realized significant
income that he failed to report, that petitioner failed to
provide to respondent’s agents books and records relating to the
roofing business, that petitioner failed to file income tax
returns, that petitioner failed to pay significant tax
liabilities that he owed, that petitioner did not cooperate with
respondent, and that petitioner made erroneous tax protester
objections to the tax laws. The evidence establishes that
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