- 23 -
United States, supra at 499; Douge v. Commissioner, 899 F.2d 164,
168 (2d Cir. 1990); Bradford v. Commissioner, 796 F.2d 303, 307-
308 (9th Cir. 1986), affg. T.C. Memo. 1984-601; Recklitis v.
Commissioner, supra at 910.
Often, a combination of factors may provide persuasive
evidence of fraud. Solomon v. Commissioner, 732 F.2d 1459, 1461
(6th Cir. 1984), affg. per curiam T.C. Memo. 1982-603. A
taxpayer’s intelligence, education, and tax expertise also may be
relevant for purposes of determining fraudulent intent.
Stephenson v. Commissioner, supra at 1006; Iley v. Commissioner,
19 T.C. 631, 635 (1952).
We acknowledge that the facts and evidence in the trial
record in this case as to the precise amount of total costs
incurred, sales proceeds, and profit petitioner realized in each
year from his illegal drug sales are not established with a great
deal of clarity. Respondent relies heavily on the testimony of
convicted felons and on grand jury testimony admitted at
petitioner’s criminal trial.
However, to find civil tax fraud, the exact amount of income
underreported by a taxpayer need not be established. It is
sufficient that respondent establish, by clear and convincing
evidence, that petitioners failed to report substantial income
for each year and did so intentionally, at which point the burden
of proof shifts to the taxpayer to prove the amount of any
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