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Fraud is a question of fact that must be considered based on
an examination of the entire record and the taxpayer’s entire
course of conduct. Petzoldt v. Commissioner, 92 T.C. 661, 699
(1989); Recklitis v. Commissioner, 91 T.C. 874, 909-910 (1988);
Rowlee v. Commissioner, 80 T.C. 1111, 1123 (1983). Fraud is
never presumed and must be established by independent evidence of
fraudulent intent. Petzoldt v. Commissioner, supra at 699;
Recklitis v. Commissioner, supra at 909-910. Fraud is never
imputed or presumed, and courts will not sustain fraud on
circumstances that at most create only suspicion. Olinger v.
Commissioner, 234 F.2d 823, 824 (5th Cir. 1956), affg. in part
and revg. in part T.C. Memo. 1955-9; Davis v. Commissioner, 184
F.2d 86, 87 (10th Cir. 1950); Green v. Commissioner, 66 T.C. 538,
550 (1976). Mere suspicion does not prove fraud, and the fact
that the Court does not find the taxpayer’s testimony wholly
credible is not sufficient to establish fraud. Cirillo v.
Commissioner, 314 F.2d 478, 482 (3d Cir. 1963), affg. in part and
revg. in part T.C. Memo. 1961-192; Shaw v. Commissioner, 27 T.C.
561, 569-570 (1956), affd. 252 F.2d 681 (6th Cir. 1958).
Although mere suspicion is not enough, fraud may be proven
by circumstantial evidence, and reasonable inferences may be
drawn from the facts because direct evidence is rarely available.
DiLeo v. Commissioner, 96 T.C. 858, 874 (1991), affd. 959 F.2d 16
(2d Cir. 1992); Petzoldt v. Commissioner, supra at 699;
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