-8-
v. Walton, 909 F.2d 915 (6th Cir. 1990); Petzoldt v.
Commissioner, supra at 699. Courts have recognized numerous
indicia of fraud, including (1) a pattern of underreporting
income, (2) the maintenance of inadequate records, (3) the giving
of implausible or inconsistent explanations of behavior, and (4)
the establishment of a pattern of inaction and delay during
pretrial and trial proceedings. Spies v. United States, 317 U.S.
492, 499 (1943); Conti v. Commissioner, 39 F.3d 658, 663 (6th
Cir. 1994), affg. and remanding on other grounds T.C. Memo. 1992-
616. Although no single factor is necessarily sufficient to
establish fraud, the existence of several indicia constitutes
persuasive circumstantial evidence of fraud. Petzoldt v.
Commissioner, supra at 700.
At trial and by facts deemed stipulated, respondent
established by clear and convincing evidence that petitioners
understated their 2000 and 2001 Federal income tax with the
intent to commit fraud and that petitioner failed to file his
1999, 2002, and 2003 returns with the same intent.4 See secs.
6651(f), 6663(a); Petzoldt v. Commissioner, supra at 699.
Petitioners have a pattern of failing to file tax returns and
understating their income when they do file income tax returns.
Petitioners also failed to maintain adequate records or cooperate
4 We also note that the record establishes clearly and
convincingly that petitioner had an underpayment for 1999, 2002,
and 2003.
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