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Failure to file income tax returns, even over an extended
period of time, does not per se establish fraud. Grosshandler v.
Commissioner, 75 T.C. 1 (1980); Coulter v. Commissioner, T.C.
Memo. 1992-224. An extended pattern of failing to file income
tax returns, however, may be persuasive circumstantial evidence
of fraud. Marsellus v. Commissioner, 544 F.2d 883, 885 (5th Cir.
1977), affg. T.C. Memo. 1975-368; Stoltzfus v. United States, 398
F.2d 1002 (3d Cir. 1968); Grosshandler v. Commissioner, supra;
Coulter v. Commissioner, supra. Further, when a taxpayer’s
failure to file for several years is viewed in light of his or
her previous filing of income tax returns for prior years, the
taxpayer’s nonfiling weighs heavily against him or her because
the taxpayer is aware of the requirement. Castillo v.
Commissioner, 84 T.C. 405 (1985).
Petitioners’ asserted “firm belief” that they were not
required to file income tax returns is implausible and
inconsistent with their own actions. Petitioners had a
consistent history of filing returns and paying taxes yet they
failed to file an income tax return for each of the years at
issue despite respondent’s numerous requests to file returns.
Further, the record establishes that both petitioners knew they
were required to file income tax returns. For example, Mrs.
Runkle timely filed a Federal income tax return for her deceased
father for 1993 as his personal representative. Petitioners also
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