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authorities; (7) filing false Forms W-4, Employee's Withholding
Allowance Certificate; (8) failure to make estimated tax
payments; (9) dealing in cash; (10) engaging in illegal activity;
(11) attempting to conceal illegal activity; (12) engaging in a
pattern of behavior that indicates an intent to mislead; and (13)
filing false documents. Bradford v. Commissioner, 796 F.2d 303,
307 (9th Cir. 1986), affg. T.C. Memo. 1984-601; see Christians v.
Commissioner, T.C. Memo. 2003-130; see also Niedringhaus v.
Commissioner, 99 T.C. 202, 211 (1992). These “badges of fraud”
are not exclusive. Niedringhaus v. Commissioner, supra at 211;
see Miller v. Commissioner, 94 T.C. 316, 334 (1990).
Additionally, the taxpayer’s background may be examined to
establish fraud. Spies v. United States, 317 U.S. 492, 497
(1943); Niedringhaus v. Commissioner; supra at 211; Walters v.
Commissioner, T.C. Memo. 1995-543.
A consistent pattern of understating large amounts of income
may be strong evidence of fraud. Camien v. Commissioner, 420
F.2d 283, 287 (8th Cir. 1970), affg. T.C. Memo. 1968-12; see
Delvecchio v. Commissioner, supra (citing Holland v. United
States, 348 U.S. 121, 137 (1954)); see also Roth v. Commissioner,
T.C. Memo. 1998-28; Williams v. Commissioner, T.C. Memo. 1992-153
(“petitioner has consistently and substantially understated his
income, a fact that even, ‘standing alone, is persuasive evidence
of fraudulent intent to evade taxes.’” (quoting Estate of Beck v.
Commissioner, 56 T.C. 297, 364 (1971)), affd. 999 F.2d 760 (4th
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