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B. Fraudulent Intent
“‘Fraud’ * * * means intentional wrongdoing on the part of a
taxpayer motivated by a specific purpose to evade a tax known or
believed to be owing.” Stoltzfus v. United States, 398 F.2d
1002, 1004 (3d Cir. 1968). The Commissioner must establish by
clear and convincing evidence that some portion of the
underpayment in each year in issue was due to fraud; he is not
required to prove the precise amount of the underpayment that
resulted from fraud. Otsuki v. Commissioner, 53 T.C. 96, 105
(1969). Because direct evidence of fraud is rarely available,
respondent may prove fraudulent intent using circumstantial
evidence. Stoltzfus v. United States, supra at 1005; DiLeo v.
Commissioner, 96 T.C. at 874; Otsuki v. Commissioner, supra at
106. In determining fraudulent intent, we consider the
taxpayer’s entire course of conduct and reasonable inferences
that may be drawn from the facts. Parks v. Commissioner, supra
at 664; Bacon v. Commissioner, T.C. Memo. 2000-257, affd. without
published opinion 275 F.3d 33 (3d Cir. 2001). Courts have looked
to the following “badges of fraud” as evidence of fraudulent
intent: (1) Understatement of income; (2) implausible or
inconsistent explanations of behavior; (3) failure to provide
return preparers with accurate and necessary information; (4)
maintaining inadequate books and records; and (5) dealing in
cash. Spies v. United States, 317 U.S. 492, 499 (1943); Bradford
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