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Memo. 1996-482, affd. without published opinion 149 F.3d 1183
(6th Cir. 1998); Katerelos v. Commissioner, T.C. Memo. 1996-340.
Petitioner’s amended returns, for the years in issue, are
admissions of underpayments because the amended returns reported
far more income than reported on the original returns.
We next decide whether petitioner’s underpayments of tax for
the years in issue were due to fraud, which is a question of fact
that must be considered based on an examination of the entire
record and petitioner’s entire course of conduct. Petzoldt v.
Commissioner, 92 T.C. 661, 699 (1989); Recklitis v.
Commissioner, 91 T.C. 874, 910 (1988); see also Rowlee v.
Commissioner, 80 T.C. 1111, 1123 (1983). Fraud is never presumed
and must be established by independent evidence of fraudulent
intent. See Petzoldt v. Commissioner, supra at 699; Recklitis v.
Commissioner, supra at 910. Fraud may be proven by
circumstantial evidence, and reasonable inferences may be drawn
from the facts because direct evidence is rarely available.
Delvecchio v. Commissioner, supra; see DiLeo v. Commissioner, 96
T.C. 858, 874 (1991), affd. 959 F.2d 16 (2d Cir. 1992); see also
Petzoldt v. Commissioner, supra at 699.
Circumstantial evidence that may give rise to a finding of
fraud includes: (1) Understatement of income; (2) inadequate
records; (3) failure to file tax returns; (4) providing
implausible or inconsistent explanations of behavior; (5)
concealment of assets; (6) failure to cooperate with taxing
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