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Commissioner, 102 T.C. 596, 607 (1994); Stone v. Commissioner,
56 T.C. 213, 220-221 (1971).
To establish fraudulent intent, respondent must prove that a
taxpayer intended to evade a tax known or believed to be owed by
conduct intended to conceal, mislead, or prevent the collection
of tax. Akland v. Commissioner, supra at 621; Powell v.
Granquist, 252 F.2d 56, 60 (9th Cir. 1958).
To find tax fraud against a corporation, respondent is
required to prove that the controlling individuals engaged in
fraudulent conduct on behalf of the corporation. Benes v.
Commissioner, 42 T.C. 358, 382 (1964), affd. 355 F.2d 929 (6th
Cir. 1966).
Fraudulent intent is rarely established by direct evidence,
and various kinds of circumstantial evidence may be relied upon
to establish fraudulent intent. Bradford v. Commissioner, 796
F.2d 303, 307 (9th Cir. 1986), affg. T.C. Memo. 1984-601. As we
have stated: “Generally, the evidence of fraudulent intent must
be gleaned by surveying the whole course of conduct of the
taxpayer with respect to the transactions in question. Although
fraud is never to be imputed or presumed, its proof may depend to
some extent upon circumstantial evidence”. Stone v.
Commissioner, supra at 224.
The Court of Appeals for the Ninth Circuit has identified
“badges of fraud” from which fraudulent intent may be inferred.
The nonexclusive list of badges of fraud includes:
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