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make estimated tax payments for the years at issue, and failing
to cooperate with tax authorities. Accordingly, we find that
petitioners’ affirmative acts are evidence of fraud.
7. Giving Implausible or Inconsistent Explanations
Since approximately 1992, petitioners have given implausible
and inconsistent explanations why they have not filed income tax
returns. Shortly after purchasing an “untaxing service” from the
American Institute, petitioners began sending letters to
respondent claiming that they were not required to file tax
returns and pay taxes. Petitioners asserted in letters to
respondent that they “are not taxpayers” as defined by the Code,
and, though knowledgeable about their taxpaying responsibilities,
consciously decided to “opt out” of the system. Petitioners also
declared to respondent that “we no longer volunteer our
involvement with your agency or any of its subdivisions” and
claimed that respondent was “operating under color of law, and
have been attempting to extort money from us.”
In addition, despite being fully aware of their legal duty
to file a return and after having filed a return each year for
more than 20 years before the years at issue, petitioners
asserted that they had a “firm belief” that they no longer had a
requirement to file a return. They acquired this firm belief
without consulting with any tax adviser and even after learning
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