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father prepared and placed before him for signature.
Additionally, there has been no showing that petitioner
collaborated or colluded with his father to defraud the
Government. Respondent has not shown, on this record, that
petitioner attempted to defraud. We have reached this conclusion
after considering the specific criteria for fraud and whether the
“badges of fraud” existed in this case.
Fraud may be proven by circumstantial evidence and
reasonable inferences drawn from the facts. Spies v. United
States, supra. A taxpayer’s course of conduct or a pattern of
conduct may establish, by inference, the intent to conceal or
mislead. Id. at 499; Otsuki v. Commissioner, 53 T.C. 96, 105-106
(1969). Respondent contends that the 3-year pattern of
underreporting income is evidence from which we should infer
petitioner’s intent to conceal or mislead. It has been held that
a pattern of underreporting of income over an extended period may
be indicative of fraud, but the mere failure to report is not
sufficient to establish fraud. Petzoldt v. Commissioner, 92 T.C.
661, 700 (1989) (and cases cited thereat).
Petitioner concedes that his income was underreported for
the 3 years. Petitioner, however, contends that he relied
(reasonably or unreasonably) upon his father and that he was
without sufficient knowledge to be culpable and/or that he did
not formulate a specific intent to evade tax, conceal, or
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