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inferences from the facts. Petzoldt v. Commissioner, 92 T.C.
661, 699 (1989). Courts have developed a nonexclusive list of
factors, or “badges of fraud”, that demonstrate fraudulent
intent. Niedringhaus v. Commissioner, 99 T.C. 202, 211 (1992).
These badges of fraud include: (1) Understating income, (2)
maintaining inadequate records, (3) implausible or inconsistent
explanations of behavior, (4) concealment of income or assets,
(5) failing to cooperate with tax authorities, (6) engaging in
illegal activities, (7) an intent to mislead which may be
inferred from a pattern of conduct, (8) lack of credibility of
the taxpayer’s testimony, (9) filing false documents, (10)
failing to file tax returns, and (11) dealing in cash. Id.; see
also Spies v. United States, 317 U.S. 492, 499 (1943); Recklitis
v. Commissioner, 91 T.C. 874, 910 (1988). Although no single
factor is necessarily sufficient to establish fraud, the
combination of a number of factors constitutes persuasive
evidence. Niedringhaus v. Commissioner, supra at 211.
Respondent must prove fraud for each year at issue. See id. at
210; Ferguson v. Commissioner, T.C. Memo. 2004-90.
Respondent has shown by clear and convincing evidence that
at least portions of the understatements on petitioner’s returns
for 1990, 1991, 1992, and 1993 are due to fraud. We believe
petitioner took possession of Taxman’s cash receipts for his own
personal use with the intent to evade taxes on that income.
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