                        T.C. Memo. 1997-50




                      UNITED STATES TAX COURT



                  JAMES E. STAFFORD, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 4778-95.                     Filed January 28, 1997.



     James E. Stafford, pro se.

     Susan V. Sample, for respondent.



                        MEMORANDUM OPINION


     GALE, Judge:   This matter is before the Court on

respondent's motion for summary judgment pursuant to Rule 121.1

Respondent determined deficiencies in and additions to

petitioner's Federal income taxes as follows:


     1
        Unless otherwise indicated, all Rule references are to
the Tax Court Rules of Practice and Procedure, and all chapter
and section references are to the Internal Revenue Code in effect
for the taxable years at issue.
                                               - 2 -


                                                  Additions to Tax
                        Sec. 6653    Sec. 6653       Sec. 6653     Sec. 6653       Sec.
Year       Deficiency    (b)(1)1       (b)(2)       (b)(1)(A)1     (b)(1)(B)       6654
                                          2
1982         $3,323      $1,662                        ---            ---           $85
                                          2
1983          4,336       2,168                        ---            ---           266
                                          2
1984          1,291         646                        ---            ---            52
                                          2
1985          3,944       1,972                        ---            ---           222
                                                                       2
1986          4,089        ---           ---          $3,067                        198
                                                                       2
1987          3,685        ---           ---           2,764                        200
1988          2,427       1,820          ---           ---            ---           153
1
  In the alternative to the additions to tax for fraud, respondent determined additions to tax
under secs. 6651(a)(1) and 6653(a)(1) and (2) for all years at issue.
2
  50 percent of the interest payable under sec. 6601 for the portion of the underpayment due to
fraud.


       Respondent moves for summary judgment as to:                            (1) The

deficiencies and the additions to tax under section 6654 for

failure to pay estimated tax; and (2) the additions to tax for

fraud under the applicable provisions of section 6653(b) for all

years at issue.2

Background

       Petitioner filed a timely petition stating, inter alia, that

"Without a grant of immunity, Petitioner is prevented from

submitting financial information sufficient to refute the taxable

income determined by Respondent lest it be used against him in a

civil or criminal matter".                The petition then discusses the Fifth

Amendment to the Constitution and certain cases interpreting that

Amendment.

       Respondent filed a timely answer, affirmatively alleging

fraud for all of the years at issue.                     Petitioner did not file a



       2
        Respondent's motion for summary judgment does not address
the secs. 6651(a)(1) and 6653(a)(1) and (2) additions to tax for
failure to timely file and for negligence, respectively, which
were determined as an alternative to fraud in the notice of
deficiency for all years and asserted in the answer for taxable
years 1982 and 1983. We do not reach those issues.
                               - 3 -


reply to respondent's answer, but since respondent did not file a

motion pursuant to Rule 37(c), the affirmative allegations of

fraud in the answer are deemed denied.

     Respondent sought to have petitioner enter into stipulations

of fact and also served on petitioner requests for admission with

respect to various matters raised in this case.   Petitioner in

response refused to stipulate any matter or to specifically

address any of the requested admissions.

     In support of his refusal either to stipulate or to admit,

petitioner took the position that his Tax Court petition is "null

and void" because respondent lacks assessment and collection

authority, in that such authority has been transferred from the

Internal Revenue Service to the Bureau of Alcohol, Tobacco, and

Firearms (BATF).

     The Court subsequently ordered petitioner to show cause why

respondent's proposed stipulations should not be accepted as

established, directing petitioner to specifically address the

factual matters raised in the proposed stipulations (show cause

order).   Petitioner declined to comply with the show cause order,

repeating the argument that respondent's assessment and

collection authority had been transferred to the BATF.

     Respondent also filed a motion to review the sufficiency of

petitioner's answers to requested admissions (motion to review).

Petitioner's response to the motion to review again referenced

the BATF argument and further stated that "Respondent's Notice of

Deficiency did not list the statute and implementing regulations
                               - 4 -


for its authority" to assess and collect taxes if a Tax Court

petition was not filed.

     By subsequent order, this Court advised petitioner that his

grounds for refusing to stipulate or admit lacked merit and

further directed him to file supplemental responses to the show

cause order and the motion to review that specifically addressed

each factual matter raised by respondent.   Petitioner was further

advised that any failure to respond as directed could result in

matters being deemed stipulated or admitted.   The Court also set

a hearing to review petitioner's responses at the commencement of

the trial calendar in Houston, Texas, on June 10, 1996.

     Petitioner's supplemental responses failed to specifically

address any matter in the proposed stipulations or the requests

for admission.   Instead, in terms substantially identical to

those previously rejected by the Court, petitioner repeated the

BATF argument, and expanded on the argument regarding the lack of

implementing regulations, claiming that title 27 of the Code of

Federal Regulations, but not title 26 thereof, contains

implementing regulations for Internal Revenue Code sections

concerned with the assessment and collection of taxes.    Thus,

petitioner concluded, the absence of regulations in title 26 of

the Code of Federal Regulations precludes respondent from

enforcing such Internal Revenue Code sections.

     At the June 10, 1996, hearing to review petitioner's

responses, petitioner renewed his argument regarding the lack of

implementing regulations and orally moved for dismissal.    In
                                - 5 -


response to the Court's request that he provide specific evidence

regarding the matters raised by respondent, petitioner refused,

stating:

     I stand on the documentation that I have provided this Court
     that there are no implementing Federal regulations in title
     26 for enforcement actions against me. I stand on that.
     That is all I have to say to this Court.

Respondent then filed the instant motion for summary judgment

pursuant to Rule 121.

        This case was recalled 2 days later.   Petitioner's oral

motion to dismiss was denied.    Petitioner's original and

supplemental responses to the show cause order were determined to

be unresponsive and, thus, not in compliance with that order and

Rule 91.    Consequently, respondent's proposed stipulations of

fact were accepted as established for purposes of this case.

Rule 91(f); Marcus v. Commissioner, 70 T.C. 562, 573 (1978),

affd. without published opinion 621 F.2d 439 (5th Cir. 1980).

Additionally, petitioner's original and supplemental responses to

respondent's requests for admission were determined to offer

neither sufficient answers nor justified objections to any

matters contained in the requested admissions.     Consequently, the

requested admissions were deemed admitted for purposes of this

case.    Rule 90(c); Marshall v. Commissioner, 85 T.C. 267, 272

(1985).    The Court then inquired of petitioner whether he had any

other evidence to submit or factual matters to dispute.

Petitioner responded in the negative.    Consequently, the Court

vacated the scheduled trial and granted petitioner 30 days to
                               - 6 -


file a response to respondent's summary judgment motion.

Petitioner's subsequently filed response is in all material

respects a repetition of his prior arguments.

     The facts deemed admitted and established may be summarized

as follows.   Petitioner resided in Kingwood, Texas, at the time

the petition was filed in this case.    Petitioner was married and

living with his wife in Texas during the years at issue, and

Texas is a community property State.3   Petitioner was employed as

an accountant from 1982 to 1988 by the same company, currently

known as British Petroleum Exploration Co.4   Petitioner also

worked for Lester Goodson Pontiac during 1984 and 1985.

Petitioner purchased food products from Yurika Foods Corp. during

1983,5 1984, 1985, 1986, 1987, and 1988.   This company pays

commissions to direct purchasers based on the number of orders.

During 1983, 1985, and 1986 petitioner had an account at Sooner

Federal Savings on which he received interest.   During 1987,

petitioner had an account at Sohio Federal Credit Union on which

he received interest.   Petitioner received the following income:



     3
        Tex. Fam. Code Ann. secs. 5.01-5.62 (West 1993).
Generally, for purposes of Federal income taxes, each spouse is
liable for the tax on his or her respective share of community
property income. Hopkins v. Bacon, 282 U.S. 122 (1930); Poe v.
Seaborn, 282 U.S. 101 (1930).
     4
        The company was called Sohio Petroleum Co. from 1982-86
and was called Standard Oil Production Co. from 1986-88.
     5
        Although the stipulation of facts states that petitioner
purchased food products from Yurika Foods Corp. during 1983, the
stipulation elsewhere indicates that there was no income from
activities with respect to Yurika Foods Corp. in that year.
                                    - 7 -


                                Lester                  Sooner       Sohio
              Sohio/Standard    Goodson       Yurika    Federal     Federal
Year               Oil          Pontiac        Foods    Savings   Credit Union
1982            $37,119.00        ---          ---        ---         ---
1983             38,705.00        ---          ---      $54.00        ---
1984             16,438.32     $1,618.93    $2,966.00     ---         ---
1985             31,722.21      1,953.46       380.69     7.51        ---
1986             51,898.12        ---           52.30     9.72        ---
1987             52,599.72        ---           45.15     ---         $3
1988             43,925.08        ---           38.40     ---         ---

Petitioner's community share of the foregoing amounts is one-

half.      Petitioner received $6,201 in distributions from Sohio

Employees Investment Plan, of which his community share is

$3,100.6     In 1985, petitioner sold 282.781 shares of Standard Oil

stock; his community share of the sale proceeds is $6,302.             In

1987, petitioner sold 8.089 shares of Standard Oil stock for

$621.12.      His community share of the sale proceeds is $311.

Petitioner submitted Forms W-4 to his employer for 1984, 1985,

1986, 1987, and 1988 stating that he was exempt from Federal

withholding.      Petitioner did not file a Federal income tax return

for the tax years 1982, 1983, 1984, 1985, 1986, 1987, and 1988.

In August 1991, an indictment was filed against petitioner for

violating section 7201 for the years 1985, 1986, and 1987.7             In



       6
        The notice of deficiency specifies that petitioner
received the Sohio Employees Investment Plan distributions in
1983.
       7
           Sec. 7201 provides:

            Any person who willfully attempts in any manner to
       evade or defeat any tax imposed by this title or the payment
       thereof shall, in addition to other penalties provided by
       law, be guilty of a felony and, upon conviction thereof,
       shall be fined not more than $100,000 * * * or imprisoned
       not more than 5 years, or both, together with the costs of
       prosecution.
                                - 8 -


November 1991, in the U.S. District Court for the Southern

District of Texas, a jury verdict was returned finding petitioner

guilty of violating section 7201 for the years 1985, 1986, and

1987.    Judgment became final in August 1994.

Discussion

     Summary judgment is appropriate "if the pleadings, * * *

admissions, and any other acceptable materials * * * show that

there is no genuine issue as to any material fact and that a

decision may be rendered as a matter of law."    Rule 121(b);

Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd.

17 F.3d 965 (7th Cir. 1994).    The party seeking summary judgment

bears the burden of proving that there is no genuine issue of

material fact.    Espinoza v. Commissioner, 78 T.C. 412, 416

(1982).

     However, the party opposing summary judgment may not rely

upon the mere allegations or denials in his pleadings but "must

set forth specific facts showing that there is a genuine issue

for trial."    Rule 121(d); Sundstrand Corp. v. Commissioner,

supra.    Petitioner has failed to do so.   Indeed, he refused to do

so on repeated occasions despite Court orders that he respond in

a specific, factual manner to respondent's proposed stipulations

and requests for admissions.    The result, under our Rules, is

that numerous facts have been deemed established for purposes of

this case.    Moreover, petitioner declined the opportunity to

prove or dispute any facts at a trial when offered the chance to

do so and likewise did not allege any factual dispute in his
                                 - 9 -


response to respondent's summary judgment motion.    In these

circumstances, we conclude that petitioner has failed to set

forth any specific fact showing there is a genuine issue for

trial in regard to the income tax deficiencies and additions to

tax under section 6654.

     The suggestion in the petition that petitioner was

"prevented" from providing financial information to refute

respondent's deficiency determination on Fifth Amendment grounds

does not alter our conclusion.    The petition states:

     Petitioner * * * has at various times offered to file 1040s
     upon receipt of a proper grant of immunity. Without a grant
     of immunity, Petitioner is prevented from submitting
     financial information sufficient to refute the taxable
     income determined by Respondent lest it be used against him
     in a civil or criminal matter. Petitioner does not need
     immunity because he believes he has committed a criminal act
     -- quite the contrary. Petitioner's fear of providing the
     information without immunity is real and substantial.
     Petitioner recently was released after serving time in a
     Federal prison for alleged income tax offences [sic]. At
     his trial, a 1040, he had filed about 1980, was used by the
     Government as an exhibit to the jury and was instrumental in
     a jury conviction. * * *

In all of petitioner's subsequent filings in this case, most of

which were in response to efforts to obtain disclosure of

information from petitioner, there was no mention of immunity or

the Fifth Amendment privilege against compulsory self-

incrimination.   Instead, petitioner took the position that

respondent lacked authority to proceed against him because of a

transfer of functions to the BATF or a lack of implementing

regulations.   Likewise, at the hearing and recall of this case,

as well as in his response to respondent's motion for summary
                             - 10 -


judgment, petitioner failed to mention any Fifth Amendment claim.

In these circumstances, we believe that petitioner abandoned

whatever Fifth Amendment privilege he may have sought to raise in

the petition.8

     In his response to respondent's motion for summary judgment,

petitioner repeats the principal grounds he has asserted

throughout the case against respondent's determination; namely,

that respondent lacks authority to assess or collect the taxes at

issue in this case because either (1) such authority has been

transferred to the BATF, or (2) there are no regulations

implementing the assessment and collection provisions of the

Internal Revenue Code.9

     As to the BATF transfer argument, petitioner asserts that

Treasury Department Order 221, 1972-1 C.B. 777, transferred

various chapters of the U.S. Code, including chapters 63 and 64,

from title 26 of that Code to title 27 of that Code.




     8
        Petitioner's Fifth Amendment assertion was made, in any
event, in connection with a blanket refusal to furnish any
information with respect to his income tax liability, which is
not protected under the Fifth Amendment. United States v.
Johnson, 577 F.2d 1304, 1311 (5th Cir. 1978); see also United
States v. Sullivan, 274 U.S. 259, 264 (1927).
     9
        A review of petitioner's filings in this case reveals one
additional argument, namely, certain alleged defects in a levy
action against petitioner, including what petitioner argues are
false or misleading statements in Form 668-W, Notice of Levy on
Wages, Salary and Other Income. The short answer to petitioner's
argument is that it has no application in this case. The Form
668-W relates to tax years 1980 and 1981. Neither of these tax
years is before the Court, and no issue regarding a levy has been
raised in these proceedings.
                               - 11 -


     Treasury Department Order 221, supra, states in pertinent

part:

          2. The Director [of the BATF] shall perform the
     functions, exercise the powers, and carry out the duties of
     the Secretary [of the Treasury] in the administration and
     enforcement of the following provisions of law:

                 (a) Chapters 51 [Distilled Spirits, Wines and
            Beer], 52 [Tobacco, Cigars, Cigarettes, and Cigarette
            Papers and Tubes], and 53 [Machine Guns and Certain
            Other Firearms] of the Internal Revenue Code of 1954
            and section 7652 and 7653 of such Code insofar as they
            relate to the commodities subject to tax under such
            chapters;

                 (b) Chapters 61 to 80, inclusive, of the Internal
            Revenue Code of 1954, insofar as they relate to
            activities administered and enforced with respect to
            chapters 51, 52, and 53 * * *

     The plain language of Treasury Department Order 221, supra,

negates petitioner's conclusion that respondent's assessment and

collection authority with respect to the deficiencies in income

tax and additions to tax here at issue has been transferred to

the BATF.   Specifically, paragraph 2(b) of Treasury Department

Order 221 states that the Order applies to chapters 61 to 80 of

the Internal Revenue Code "insofar as they relate to" (emphasis

added) activities administered and enforced with respect to

chapters 51 (alcohol), 52 (tobacco), and 53 (firearms).

Consequently, to the extent that chapters 61 to 80 govern

procedure and administration for income and other taxes, Treasury

Department Order 221, supra, by its plain terms has no

application.   Accordingly, there is no basis for petitioner's

argument that there has been a transfer or elimination of

respondent's authority to act pursuant to chapters 61 to 80 with
                                   - 12 -


respect to the deficiencies and additions to tax here at issue.

For the same reasons, neither the Code of Federal Regulations nor

the parallel table of authorities cited by petitioner supports

his BATF transfer argument.10       We see no reason to belabor that

point.

        As to petitioner's argument concerning a lack of

implementing regulations, petitioner's contention that title 27,

but not title 26, of the Code of Federal Regulations contains

implementing regulations for various Internal Revenue Code

sections,11 including those sections contained in chapters 63 and

64 regarding assessment and collection, is incorrect as a matter

of fact.       Numerous regulations have been promulgated concerning

respondent's assessment and collection authority as it may bear

on these proceedings.       See, e.g., secs. 301.6020-1, 301.6201-1,

301.6203-1, 301.6211-1, 301.6212-1, 301.6213-1, 301.6215-1,

301.6301-1, 301.6303-1, 301.6601-1, 301.6651-1, Proced. & Admin.

Regs.        Petitioner's challenge to respondent's assessment and

collection authority has no merit.          Respondent validly issued a

notice of deficiency under the authority of sections 6211 and

6212.        Petitioner has invoked the jurisdiction of this Court



        10
        The parallel table of authorities is merely an ancillary
finding device included in the Code of Federal Regulations.
        11
        Petitioner cites the following Internal Revenue Code
secs.: 6020, 6201, 6203, 6301, 6303, 6321, 6331 through 6343,
6601, 6602, 6651, 6701, and 7207. Secs. 6321, 6331-6343, 6701,
and 7207 relate to issues that are not, in any conceivable way,
raised in these proceedings. We see no need to address those
provisions.
                                - 13 -


under section 6213, and respondent has refrained from assessing

or collecting the taxes here at issue pending a final decision of

this Court, as also provided in section 6213.    All three of these

Internal Revenue Code sections have implementing regulations.

See secs. 301.6211-1, 301.6212-1, 301.6213-1, Proced. & Admin.

Regs.     Petitioner's claim that a lack of implementing regulations

vitiates respondent's authority to proceed in this case is

unfounded.12

     12
        Contrary to petitioner's claims, the absence of
implementing regulations would not, generally speaking, preclude
the Commissioner from enforcing sections of the Internal Revenue
Code. Provisions of the Internal Revenue Code generally do not
require implementing regulations as a prerequisite to
enforcement. See Occidental Petroleum Corp. v. Commissioner, 82
T.C. 819, 829 (1984); see also E.I. du Pont de Nemours & Co. v.
Commissioner, 102 T.C. 1, 13 (1994), affd. 41 F.3d 130 (3d Cir.
1994), affd. sub nom. Conoco, Inc. v. Commissioner, 42 F.3d 972
(5th Cir. 1995).

     Petitioner's reliance on California Bankers Association v.
Shultz, 416 U.S. 21 (1974); Lyeth v. Hoey, 305 U.S. 188 (1938);
and Dodd v. United States, 223 F. Supp. 785 (D.N.J. 1963), affd.
345 F.2d 715 (3d Cir. 1965), for the proposition that the
Commissioner lacks authority to enforce Internal Revenue Code
provisions without implementing regulations, is misplaced.

     Petitioner quotes, out of context, the observation in Dodd
that "For Federal tax purposes, the Federal Regulations govern."
Dodd v. United States, supra at 787. But the proposition for
which Dodd and Lyeth v. Hoey, supra, stand is that Federal
regulations, not local law, control when construing a Federal tax
statute unless the statute expressly or impliedly makes its
operation dependent upon local law. Petitioner's circumstances
do not present this issue.

     Petitioner quotes from California Bankers Association v.
Shultz, supra at 26, the following:

     we think it important to note that the Act's civil and
     criminal penalties attach only upon violation of
     regulations promulgated by the Secretary; if the
                                                   (continued...)
                              - 14 -


     Consequently, neither the BATF transfer nor the implementing

regulations argument helps petitioner.   They provide no grounds

to deny respondent's motion for summary judgment, nor do they

justify petitioner's refusal to provide responsive answers to

respondent's proposed stipulations and requests for admission.

1. The Deficiencies and Additions to Tax for Failure To Pay
Estimated Tax Under Section 6654 for Tax Years 1982-88

    Respondent's determinations of income tax deficiencies in

the notice of deficiency are presumed correct, and it is

petitioner's burden to prove that they are incorrect.   Rule

142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).     The

section 6654 addition to tax for failure to pay estimated tax is

mandatory unless petitioner establishes that a statutory

exception applies.   Grosshandler v. Commissioner, 75 T.C. 1,

20-21 (1980).

    Throughout these proceedings, petitioner has refused to

offer any evidence directed towards the deficiencies or the

section 6654 additions to tax as determined in the notice of

deficiency.   Moreover, for the reasons stated previously,

     12
      (...continued)
     Secretary were to do nothing, the Act itself would
     impose no penalties on anyone.

However, the Supreme Court was therein describing the particular
statutory scheme of the Bank Secrecy Act of 1970, under which
regulations were required to be promulgated before the penalties
in the statute could attach. The situation in the instant case
is clearly distinguishable. As discussed supra, the authority
being exercised with respect to petitioner is expressly provided
by statute. Such authority is not preconditioned on the
promulgation of regulations, as were the penalties in California
Bankers.
                              - 15 -


petitioner is deemed to have admitted that he received taxable

income from various sources, including wages and nonemployee

compensation, for all years at issue.   Petitioner is further

deemed to have admitted that he failed to file Federal income tax

returns reporting that income for any year.

     On the basis of this record, we find that there is no

genuine issue of material fact as to the deficiencies and

additions to tax under section 6654 for failure to pay estimated

tax, and a decision may be rendered as a matter of law.

Therefore, respondent's motion for summary judgment will be

granted with respect to these issues.

2.   Fraud Additions to Tax

     In order to prevail on the proposed additions to tax for

fraud, respondent must prove by clear and convincing evidence

that an underpayment exists in the years at issue and that some

portion of the underpayment is due to fraud.   Sec. 7454(a); Rule

142(b); Petzoldt v. Commissioner, 92 T.C. 661, 699 (1989).      For

purposes of section 6653(b), an underpayment is the full amount

of the tax imposed where the taxpayer fails to file a return.

Sec. 6653(c)(1); Bagby v. Commissioner, 102 T.C. 596, 607 (1994);

sec. 301.6653-1(c)(1)(ii), Proced. & Admin. Regs.

     Respondent may meet her burden of proving liability for the

additions to tax for fraud by deemed admissions and facts deemed

stipulated.   Coninck v. Commissioner, 100 T.C. 495, 499 (1993);

Smith v. Commissioner, 91 T.C. 1049, 1052-1053 (1988), affd. 926

F.2d 1470 (6th Cir. 1991), and cases cited therein.       Petitioner
                              - 16 -


is deemed to have admitted receiving taxable income for all years

at issue and failing to file returns for those years reporting

the income.   Hence, respondent has shown by clear and convincing

evidence that an underpayment exists for all years at issue.

    As to evidence that some portion of the underpayment for the

tax years 1985, 1986, and 1987 is due to fraud, a conviction for

willful attempt to evade or defeat income taxes under section

7201 precludes a taxpayer in a subsequent civil tax proceeding

from denying that an underpayment in his income tax for the

taxable year of conviction was due to fraud.   Tomlinson v.

Lefkowitz, 334 F.2d 262, 265 (5th Cir. 1964); Amos v.

Commissioner, 43 T.C. 50, 53-56 (1964), affd. 360 F.2d 358 (4th

Cir. 1965).

    It has been stipulated that petitioner was convicted under

section 7201 for tax years 1985, 1986, and 1987 in the U.S.

District Court for the Southern District of Texas, and the

judgment became final in August 1994.   Thus, petitioner is

precluded from denying that underpayments of his income taxes for

1985, 1986, and 1987 were due to fraud.   Consequently,

respondent's motion for summary judgment on the fraud issue as to

1985, 1986, and 1987 will be granted.

    As to evidence that some portion of the underpayment for the

tax years 1982, 1983, 1984, and 1988 is due to fraud, the

Commissioner meets her burden of proof if it is shown that the

taxpayer intended to evade taxes known to be owing by conduct

intended to conceal, mislead, or otherwise prevent the collection
                               - 17 -


of such taxes.    Rowlee v. Commissioner, 80 T.C. 1111, 1123

(1983); see also Stoltzfus v. United States, 398 F.2d 1002, 1004

(3d Cir. 1968); Webb v. Commissioner, 394 F.2d 366, 377-378 (5th

Cir. 1968), affg. T.C. Memo. 1966-81.

    When fraud is alleged for multiple tax years, the

Commissioner must meet her burden of proof for each tax year.

Castillo v. Commissioner, 84 T.C. 405, 409 (1985).     The existence

of fraud is a question of fact to be decided on consideration of

the entire record.    Gajewski v. Commissioner, 67 T.C. 181, 199

(1976), affd. without published opinion 578 F.2d 1383 (8th Cir.

1978).    Fraud is never presumed.   Beaver v. Commissioner, 55 T.C.

85, 92 (1970).    Because direct proof is seldom available, fraud

may be proven by circumstantial evidence.      Stephenson v.

Commissioner, 79 T.C. 995, 1005-1006 (1982), affd. 748 F.2d 331

(6th Cir. 1984); Otsuki v. Commissioner, 53 T.C. 96, 105-106

(1969).

    The taxpayer's entire course of conduct may establish fraud.

Spies v. United States, 317 U.S. 492 (1943); Castillo v.

Commissioner, supra.    This includes conduct frequently considered

"badges" or indicia of fraud such as:     (1) Failure to file

returns; (2) failure to report income over an extended period of

time; (3) the taxpayer's experience and knowledge, Solomon v.

Commissioner, 732 F.2d 1459, 1461-1462 (6th Cir. 1984), affg.

T.C. Memo. 1982-603; (4) filing false Forms W-4; and (5) failure

to make estimated tax payments.      Bradford v. Commissioner, 796

F.2d 303, 307-308 (9th Cir. 1986), affg. T.C. Memo. 1984-601;
                               - 18 -


Recklitis v. Commissioner, 91 T.C. 874, 910 (1988); Rowlee v.

Commissioner, supra at 1125.

    Although failure to file tax returns, even over an extended

period, may not per se establish fraud, it is persuasive

circumstantial evidence of fraud.   Marsellus v. Commissioner, 544

F.2d 883, 885 (5th Cir. 1977), affg. T.C. Memo. 1975-368;

Recklitis v. Commissioner, supra at 910-911.

    Petitioner is deemed to have admitted that he submitted

Forms W-4 for tax years 1984 and 1988 to his employer claiming

that he was exempt from Federal withholding.13   Although the

Forms W-4 are not part of the record, the Court takes judicial

notice of the 1984 and 1988 Forms W-4 and relevant instructions

(as published by the U.S. Government Printing Office) for

purposes of evaluating whether petitioner's filing was false.

See Recklitis v. Commissioner, supra at 911 and n.13.

    The 1984 and 1988 Forms W-4 required taxpayers to certify

under penalties of perjury that they were entitled to claim

exempt status.   In order to qualify for exempt status, the Forms

W-4 provide that the following two requirements must be met:

    a   Last year I did not owe any Federal income tax and had a
    right to a full refund of ALL income tax withheld, AND




     13
        Petitioner is also deemed to have admitted filing Forms
W-4 claiming exemption for 1985, 1986, and 1987. Because we are
granting respondent's motion for summary judgment for 1985, 1986,
and 1987 as to fraud based on petitioner's conviction under sec.
7201, we need not consider the filing of Forms W-4 for 1985,
1986, and 1987.
                                - 19 -


       b   This year I do not expect to owe any Federal income tax
       and expect to have a right to a full refund of ALL income
       tax withheld. * * *

       Petitioner is deemed to have admitted that he received

substantial taxable income from various sources during the years

relevant to the Forms W-4 (1983, 1984, 1987, and 1988) but failed

to file Federal income tax returns for each of these years.

Thus, petitioner's deemed admissions unequivocally discredit his

sworn certification that he satisfied both requirements to

qualify for exempt status.    Moreover, petitioner is deemed to

have admitted that he was employed as an accountant by British

Petroleum Exploration Co. from 1983 to 1988.    It is implausible

that petitioner's experience as an accountant would lead him to

conclude that he satisfied both requirements to qualify for

exempt status.    Therefore, we conclude that petitioner's Forms W-

4 for 1984 and 1988 were fraudulent.

       Consequently, for 1984 and 1988, petitioner's failure to

file Federal income tax returns, submission of fraudulent Forms

W-4, and experience as an accountant, coupled with his failure to

report substantial amounts of income, present clear and

convincing evidence of fraud.    Thus, there is no genuine issue as

to a material fact, and a decision may be rendered as a matter of

law.    Respondent's motion for summary judgment as to the

additions to tax for fraud for 1984 and 1988 will be granted.

       However, the tax years 1982 and 1983 merit a different

result.    There is no evidence of a criminal conviction under

section 7201 or that petitioner filed fraudulent Forms W-4 for
                                - 20 -


these 2 years.   Thus, on this record, we find and hold that

respondent has failed to show the requisite intent to evade taxes

by conduct intended to conceal, mislead, or otherwise prevent the

collection of taxes, see Rowlee v. Commissioner, supra, by clear

and convincing evidence for the tax years 1982 and 1983.

Circumstances which at most create only a suspicion of fraud will

not support a finding of fraud.    Parks v. Commissioner, 94 T.C.

654, 664 (1990).   Accordingly, respondent's motion for summary

judgment will be denied as to the fraud additions for tax years

1982 and 1983.

    To reflect the foregoing,

                                     An appropriate order will

                                be issued.
