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independent evidence. Recklitis v. Commissioner, supra at 910;
Castillo v. Commissioner, supra; Beaver v. Commissioner, 55 T.C.
85, 92 (1970). Because, however, direct proof of a taxpayer’s
intent is often not available, fraud may be proved by
circumstantial evidence. Grossman v. Commissioner, supra at 277;
Boyett v. Commissioner, 204 F.2d 205, 208 (5th Cir. 1953), affg.
a Memorandum Opinion of this Court; Castillo v. Commissioner,
supra; Stephenson v. Commissioner, 79 T.C. 995, 1005-1006 (1982),
affd. 748 F.2d 331 (6th Cir. 1984); Gajewski v. Commissioner,
supra at 200. The taxpayer’s entire course of conduct may
establish the requisite fraudulent intent. Spies v. United
States, 317 U.S. 492 (1943); Castillo v. Commissioner, supra;
Gajewski v. Commissioner, supra; Stone v. Commissioner, supra at
223-224.
Over the years, courts have developed a nonexclusive list of
factors that demonstrate fraudulent intent. These “badges of
fraud” include: (1) Understating income; (2) maintaining
inadequate records; (3) failing to file tax returns;
(4) implausible or inconsistent explanations of behavior;
(5) concealment of income or assets; (6) failing to cooperate
with tax authorities; (7) engaging in illegal activities; (8) an
intent to mislead which may be inferred from a pattern of
conduct; (9) lack of credibility of the taxpayer’s testimony;
(10) filing false documents; and (11) dealing in cash. Spies v.
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