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until faced with the prospect of criminal prosecution. As
evidenced by the applications he filed with Abingdon, petitioner
was aware that he had substantial gross income from his dental
practice. When petitioner finally did file tax returns for the
years in issue, he understated his aggregate gross income by
approximately $268,264. Petitioner maintained no books and
records of his income and expenses. According to undisputed
testimony of respondent’s special agent, petitioner indicated
during the criminal investigation that he had avoided investing
in assets such as real estate that he believed the Internal
Revenue Service (IRS) could seize in collection of back taxes.
Instead, he invested in assets such as gold and silver bars and a
Swiss annuity that he believed the IRS could not seize. Such
statements are inconsistent with any good-faith misunderstanding
of the tax laws that could negate fraud. Cf. Niedringhaus v.
Commissioner, 99 T.C. 202, 217 (1992).
Although petitioner attended trial, he declined the
opportunity to testify and failed to introduce any evidence. We
draw an adverse inference from petitioner’s silence and take it
into account as a factor to be considered in combination with all
the other evidence in the record. See Sherrer v. Commissioner,
T.C. Memo. 1999-122.
On the basis of all the evidence, we conclude that
petitioner is liable for the section 6651(f) addition to tax for
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