- 16 -
307. This list is nonexclusive. Niedringhaus v. Commissioner,
supra at 211. While no single factor is necessarily sufficient
to establish fraud, the existence of several indicia may
constitute persuasive circumstantial evidence of fraud. Petzoldt
v. Commissioner, 92 T.C. 661, 700 (1989).
Respondent first argues that petitioner’s failure to file
any employment tax returns for the workers in question is
evidence of fraud. The failure to file tax returns, even over an
extended period, does not per se establish fraud. Marsellus v.
Commissioner, 544 F.2d 883, 885 (5th Cir. 1977), affg. T.C. Memo.
1975-368. However, an extended pattern of failing to file tax
returns may be persuasive circumstantial evidence of fraud. Id.;
Grosshandler v. Commissioner, 75 T.C. 1, 19 (1980).
We find that petitioner’s failure to file employment tax
returns as evidence of fraud is mitigated by the technical nature
of the question of the employees’ status in this case. We do
note that petitioner also failed to file the required Forms 1099
for each of the alleged independent contractors who was paid more
than $600. While this failure is inconsistent with petitioner’s
position concerning the status of the workers, we do not find it
evidence of fraud. Accordingly, we find petitioner’s failure to
file employment tax returns is not compelling evidence of fraud
on these facts.
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