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(1) Understatement of income;
(2) inadequate records;
(3) failure to file tax returns;
(4) implausible or inconsistent explanations of behavior;
(5) concealing assets;
(6) failure to cooperate with tax authorities;
(7) engaging in illegal activities; and
(8) dealing in large amounts of cash.
See Edelson v. Commissioner, 829 F.2d 828, 832 (9th Cir. 1987);
Bradford v. Commissioner, supra at 307-308; Baker v.
Commissioner, T.C. Memo. 1991-340, affd. without published
opinion 9 F.3d 1550 (9th Cir. 1993).
While the underreporting of income itself may be
insufficient to support a finding of fraud, “repeated
understatements in successive years when coupled with other
circumstances showing an intent to conceal or misstate taxable
income present a basis on which the Tax Court may properly infer
fraud.” Furnish v. Commissioner, 262 F.2d 727, 728 (9th Cir.
1958), affg. in part and remanding in part 29 T.C. 279 (1957).
Consistent, substantial understatements of income for several
years is highly persuasive evidence of intent to defraud the
Government. Powell v. Granquist, supra at 60.
If respondent establishes that any portion of an
underpayment is attributable to fraud, the entire underpayment is
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