Zinovy Brodsky - Page 68




                                       - 152 -                                         
          211.  Although no single factor is necessarily sufficient to                 
          establish fraud, the existence of several indicia constitutes                
          persuasive circumstantial evidence of fraud.  Bradford v. Commis-            
          sioner, supra at 307; Petzoldt v. Commissioner, supra at 700.                
               In support of respondent’s position that petitioner intended            
          to evade tax for each of the years at issue, which he believed to            
          be owing, by conduct intended to conceal, mislead, or otherwise              
          prevent the collection of such tax, respondent relies on the                 
          following factors:  Petitioner’s consistent and substantial                  
          understatement of income for the years at issue; petitioner’s                
          failure to maintain adequate books and records; petitioner’s                 
          failure to cooperate with respondent’s agents during the examina-            
          tion of the years at issue, including his lack of credibility in             
          certain of his dealings with those agents.                                   
               Although we agree with respondent that the factors on which             
          respondent relies to prove fraudulent intent are present in the              
          instant case, based on our examination of the entire record                  
          before us, we find that petitioner’s actions raise only a suspi-             
          cion, albeit a strong suspicion, of fraud for each of those                  
          years.  See Toussaint v. Commissioner, supra at 312; Petzoldt v.             
          Commissioner, supra at 700.  We are not persuaded by clear and               
          convincing evidence that petitioner’s actions of substantially               
          underreporting his income for each of the years at issue and                 
          failing to maintain adequate books and records for each of those             
          years were attributable to his fraudulent intent to evade tax                
          when he filed the joint return for each such year, as opposed to             
          his negligence and his disregard of tax rules and regulations.               




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