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(6) failure to cooperate with tax authorities; (7) filing false
Forms W-4; (8) failure to make estimated payments; (9) dealing in
cash; (10) engaging in illegal activity; and (11) attempting to
conceal illegal activity. See Bradford v. Commissioner, 796 F.2d
303, 307 (9th Cir. 1986), affg. T.C. Memo. 1984-601; Recklitis v.
Commissioner, 91 T.C. 874, 910 (1988). This list is
nonexclusive. See Miller v. Commissioner, 94 T.C. 316, 334
(1990).
With regard to whether respondent has shown that an
understatement exists, petitioner himself admitted that certain
items of income were not reported on his tax returns. In
addition, clear and convincing evidence establishes that
petitioner underreported his gross receipts, interest income, and
capital gains. Accordingly, we find that respondent has met his
burden of proving an underpayment by clear and convincing
evidence.
In this case, petitioner has willfully failed to file timely
tax returns for the 1987, 1988, 1989, and 1990 taxable years. At
the time the audit commenced in late 1990, petitioner had not
filed returns for the 1981, 1982, 1983, 1984, 1985, 1987, 1988,
or 1989 tax years. This is persuasive evidence of fraud. See
Marsellus v. Commissioner, 544 F.2d 883 (5th Cir. 1977), affg.
T.C. Memo. 1975-368.
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