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from the relevant facts. Spies v. United States, 317 U.S. 492
(1943); Stephenson v. Commissioner, 79 T.C. 995 (1982), affd.
748 F.2d 331 (6th Cir. 1984). Where fraud is determined for
multiple years, as is the case here, respondent must establish
the requisite fraudulent intent for each of the years in order to
prevail as to all of the years. The Court may sustain
respondent’s determination of fraud only as to those years for
which the fraudulent intent is established clearly and
convincingly. Fraud requires a showing that the taxpayer
intended to evade a tax known or believed to be owing by conduct
intended to conceal, mislead, or otherwise prevent the collection
of tax. Stoltzfus v. United States, 398 F.2d 1002, 1004 (3d.
Cir. 1968).
We often rely on certain indicia of fraud in deciding the
existence of fraud. The presence of several indicia is
persuasive circumstantial evidence of fraud. Beaver v.
Commissioner, 55 T.C. 85, 93 (1970). The “badges of fraud”
include: (1) Understatement of income; (2) maintenance of
inadequate records; (3) failure to file tax returns;
(4) implausible or inconsistent explanations of behavior;
(5) concealment of income or assets; (6) failure to cooperate
with tax authorities; (7) engaging in illegal activities;
(8) dealing in cash; (9) failure to make estimated tax payments;
and (10) filing false documents. Spies v. United States, supra;
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