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prove by clear and convincing evidence that the taxpayer intended
to evade tax, which he or she believed to be owing, by conduct
intended to conceal, mislead, or otherwise prevent the collection
of such tax. Laurins v. Commissioner, 889 F.2d 910, 913 (9th
Cir. 1989), affg. Norman v. Commissioner, T.C. Memo. 1987-265;
Parks v. Commissioner, supra at 661. The existence of fraud is a
question of fact to be resolved upon consideration of the entire
record. DiLeo v. Commissioner, supra at 874; Gajewski v. Commis-
sioner, 67 T.C. 181, 199 (1976), affd. without published opinion
578 F.2d 1383 (8th Cir. 1978). Fraud is never presumed or
imputed and should not be found in circumstances which create at
most only suspicion. Toussaint v. Commissioner, 743 F.2d 309,
312 (5th Cir. 1984), affg. T.C. Memo. 1984-25; Petzoldt v.
Commissioner, supra at 699-700. Direct evidence of the requisite
fraudulent intent is seldom available. Petzoldt v. Commissioner,
supra at 699; Rowlee v. Commissioner, 80 T.C. 1111, 1123 (1983).
Consequently, the Commissioner may prove fraud by circumstantial
evidence. Toussaint v. Commissioner, supra at 312; Rowlee v.
Commissioner, supra at 1123; see Marsellus v. Commissioner, 544
F.2d 883, 885 (5th Cir. 1977), affg. T.C. Memo. 1975-368.
The courts have identified a number of badges of fraud from
which fraudulent intent may be inferred, including (1) the
understatement of income, (2) the making of false and inconsis-
tent statements to revenue agents, and (3) the failure to cooper-
ate with tax authorities. See Bradford v. Commissioner, 796 F.2d
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