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behavior; (5) concealment of assets; and (6) failure to cooperate
with tax authorities. The Court of Appeals also stated that the
existence of the following facts additionally supports a finding
of fraudulent intent: (1) Dealing in cash to avoid scrutiny of
finances, and (2) failing to make estimated tax payments. See
id. at 308.
We affirm respondent’s determination of the fraud addition
to tax and penalties. Petitioner’s conduct displays many of the
“badges” of fraud.
As described in detail above, petitioner significantly
understated income and maintained inadequate records to explain
the nature and sources of his deposits.
Petitioner also provided implausible and inconsistent
explanations of his deposits. He lied to Agent Bricker during
the criminal investigation, stating that not more than one or two
checks for the purchase of computer equipment had been deposited
into his personal account, and that any such checks deposited to
his account would have been the result of a bank error. In fact,
as petitioner knew full well, hundreds of such checks had been
deposited to his account. Petitioner also lied when he testified
that he did not tell customers to leave the payee lines blank, to
make PAC checks payable to him, or to pay in cash. Barry
Sharrow, Richard Eberli, Dexter Duncan, Dale Rutz, and Tim Earle
all testified that petitioner told them to leave the payee line
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