Page:T.C. Memo. 2012-281.pdf/56

[*56] Petitioner did not file her Federal tax returns for the years at issue until after Revenue Agent Alyce Faye contacted her about the civil audit and respondent issued her a 30-day letter. Petitioner did not timely file tax returns for 1998-99 and 2000-06. Petitioner's untimely filing of her tax returns over an extended period is circumstantial evidence of fraud.

Extensive dealings in cash to avoid scrutiny of a taxpayer's finances is a badge of fraud. , 796 F.2d at 307-308. Fraudulent intent may be inferred when a taxpayer handles his or her affairs in a manner designed "to avoid making the records usual in transactions of the kind". , 317 U.S. at 499. In particular, when a taxpayer's dealings in cash are accompanied by attempts to conceal transactions or avoid cash transaction reporting requirements, that course of conduct is probative evidence of fraud. , T.C. Memo. 2004-242, slip op. at 8-9.

During the years at issue petitioner drafted and signed checks made payable to cash. Petitioner was the individual at CSE primarily responsible for drafting and signing checks to cash and the individual who went to the bank to withdraw the cash from CSE's accounts. In addition, respondent introduced credible