Orion Contracting Trust, Kevin Peter Carmel, General Manager - Page 15

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               Fraud is defined as an intentional wrongdoing designed to              
          evade tax known or believed to be owing.  Edelson v.                        
          Commissioner, 829 F.2d 828, 833 (9th Cir. 1987), affg. T.C. Memo.           
          1986-223; Bradford v. Commissioner, 796 F.2d 303, 307 (9th Cir.             
          1986), affg. T.C. Memo. 1984-601.  The existence of fraud is a              
          question of fact to be resolved upon consideration of the entire            
          record.  DiLeo v. Commissioner, 96 T.C. 858, 874 (1991), affd.              
          959 F.2d 16 (2d Cir. 1992).  Fraud is never presumed and must be            
          established by independent evidence that establishes fraudulent             
          intent.  Beaver v. Commissioner, 55 T.C. 85, 92 (1970).  Fraud              
          may be proven by circumstantial evidence because direct evidence            
          of the taxpayer’s fraudulent intent is seldom available.  Rowlee            
          v. Commissioner, 80 T.C. 1111, 1123 (1983).  The taxpayer’s                 
          entire course of conduct may establish the requisite fraudulent             
          intent.  Niedringhaus v. Commissioner, 99 T.C. 202, 210 (1992).             
               Courts have developed several indicia, or “badges of fraud”,           
          from which the requisite fraudulent intent can be inferred.  They           
          include: (1) Failing to file tax returns, (2) understating                  
          income, (3) concealing assets, (4) failing to cooperate with tax            
          authorities, (5) making frivolous arguments, (6) failing to make            
          estimated tax payments, (7) giving implausible or inconsistent              
          explanations of behavior, and (8) being convicted of willful                
          failure to file an income tax return.  Douge v. Commissioner, 899           
          F.2d 164, 168 (2d Cir. 1990); Bradford v. Commissioner, supra at            






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