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with respondent, and they consistently provided respondent’s
representatives with implausible or inconsistent explanations for
their behavior. See Bradford v. Commissioner, 796 F.2d 303, 307
(9th Cir. 1986) (stating that the failure to report income,
maintain adequate records, and cooperate with the Commissioner
are “badges of fraud” from which fraudulent intent may be
inferred), affg. T.C. Memo. 1984-601. Petitioners conducted
transactions in cash during the years at issue and failed to
substantiate the sources of their cash; their failure to classify
their cash transactions and expenses in a manner consistent with
applicable law for the taxable years at issue was fraudulent with
the intent to evade tax. Accordingly, petitioner is liable for
the 6651(f) addition to tax, and petitioners are both liable for
the section 6663 penalty.
To reflect the foregoing,
An order of dismissal and decisions
will be entered for respondent.
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