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The facts alleged in respondent’s affirmative pleadings are
sufficient to establish fraud by clear and convincing evidence.
Petitioner received substantial amounts of unreported income.
Bradford v. Commissioner, 796 F.2d 303, 308 (9th Cir. 1986),
affg. T.C. Memo. 1984-601. Petitioner’s pattern of substantially
underreporting income for several years is strong evidence of
fraud, Holland v. United States, 348 U.S. 121, 137-139 (1954), as
is the fact that he deliberately overstated his deductions,
Drobny v. Commissioner, 86 T.C. 1326, 1349-1351 (1986).
The facts pleaded in respondent's answer clearly establish
that petitioner fraudulently underpaid his income taxes for 1988
and 1989. Thus, we will grant respondent's motion for default
pursuant to Rule 123(a).
An appropriate order and
decision will be entered.
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