Frank H. and Marla C. Black - Page 24

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          Cir. 1975).  The existence of fraud is a question of fact to be             
          resolved from the entire record.  Gajewski v. Commissioner, 67              
          T.C. 181, 199 (1976), affd. without published opinion 578 F.2d              
          1383 (8th Cir. 1978).                                                       
               However, fraud need not be established by direct evidence,             
          which is rarely available, but may be proved by surveying the               
          taxpayer’s entire course of conduct and drawing reasonable                  
          inferences therefrom.  Spies v. United States, 317 U.S. 492, 499            
          (1943).  Courts have relied on a number of indicia or badges of             
          fraud in deciding whether to sustain the Commissioner’s                     
          determinations with respect to the additions to tax for fraud.              
          Although no single factor may be necessarily sufficient to                  
          establish fraud, the existence of several indicia may be                    
          persuasive circumstantial evidence of fraud.  Solomon v.                    
          Commissioner, 732 F.2d 1459, 1461 (6th Cir. 1984), affg. per                
          curiam T.C. Memo. 1982-603; Beaver v. Commissioner, 55 T.C. 85,             
          93 (1970).                                                                  
               Circumstantial evidence that may give rise to a finding of             
          fraudulent intent includes:  Understatement of income, inadequate           
          records, failure to file tax returns, concealment of assets,                
          failure to cooperate with tax authorities, filing false                     
          documents, failure to make estimated tax payments, engaging in              
          illegal activity, attempting to conceal illegal activity, dealing           
          in cash, implausible or inconsistent explanations of behavior, an           

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