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returns, and (11) dealing in cash. Spies v. United States,
supra at 499; Douge v. Commissioner, 899 F.2d 164, 168 (2d Cir.
1990); Bradford v. Commissioner, 796 F.2d 303, 307-308 (9th Cir.
1986), affg. T.C. Memo. 1984-601; Recklitis v. Commissioner, 91
T.C. 874, 910 (1988). Although no single factor is necessarily
sufficient to establish fraud, the combination of a number of
factors constitutes persuasive evidence. Solomon v.
Commissioner, 732 F.2d 1459, 1461 (6th Cir. 1984), affg. per
curiam T.C. Memo. 1982-603.
1. Petitioner’s Sophistication and Experience
Petitioner is an electrician with a high school education.
He also took some college correspondence courses. On the basis
of these facts, we shall not hold petitioner to either a high or
low standard while evaluating his actions.
2. Consistent and Substantial Understatements of Income
The mere failure to report income is not sufficient to
establish fraud. Merritt v. Commissioner, 301 F.2d 484, 487 (5th
Cir. 1962), affg. T.C. Memo. 1959-172. Consistent and
substantial understatements of income, however, may be strong
evidence of fraud when coupled with other circumstances. Marcus
v. Commissioner, 70 T.C. 562, 577 (1978), affd. without published
opinion 621 F.2d 439 (5th Cir. 1980). A pattern of consistent
underreporting of income, when accompanied by other circumstances
indicating an intent to conceal income, may justify the inference
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