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Cir. 1982)(citing Powell v. Granquist, 252 F.2d 56, 60 (9th Cir.
1958)), affg. in part and revg. in part 74 T.C. 1160 (1980).
The existence of fraud is a question of fact to be resolved
upon consideration of the entire record. See Gajewski v.
Commissioner, 67 T.C. 181, 199 (1976), affd. without published
opinion 578 F.2d 1383 (8th Cir. 1978). Fraud is never imputed or
presumed; it must be affirmatively established by the
Commissioner. See Beaver v. Commissioner, 55 T.C. 85, 92 (1970).
Fraudulent intent is rarely established by direct evidence.
As a consequence courts have inferred fraudulent intent from
various kinds of circumstantial evidence. See Spies v. United
States, 317 U.S. 492, 499 (1943); Powell v. Granquist, supra at
61. Some of the indicia of fraud include: (1) Understatement of
income, (2) inadequate records, (3) failure to file tax returns,
(4) implausible or inconsistent explanations of behavior, (5)
concealing assets, (6) failure to cooperate with tax authorities,
(7) engaging in illegal activities, (8) attempting to conceal
illegal activities, (9) dealing in cash, and (10) failing to make
estimated tax payments. See Bradford v. Commissioner, supra at
307-308. Willful failure to file does not in itself establish
liability for additions to tax on account of fraud. However,
such a failure may be properly considered in connection with
other facts in determining whether any deficiency or underpayment
of tax is due to fraud. See Stoltzfus v. United States, supra.
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