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filing period. We conclude that these returns were filed
untimely. Because Mrs. Sparrow has also failed to prove that
either of these untimely filings was due to reasonable cause and
not due to willful neglect, we sustain respondent's
determination.
5. Fraud--Section 6653(b)
Respondent must meet her burden of proving fraud through
affirmative evidence; fraud is never imputed or presumed.
Beaver v. Commissioner, 55 T.C. 85, 92 (1970). Whether fraud
exists in a given situation is a factual determination that must
be made after reviewing the particular facts and circumstances of
the case. DiLeo v. Commissioner, 96 T.C. 858, 874 (1991), affd.
959 F.2d 16 (2d Cir. 1992). Respondent must show clearly that
petitioner intended to evade a tax known or believed to be owing.
Stoltzfus v. United States, 398 F.2d 1002, 1004 (3d Cir. 1968).
Based on our review of the record, we are not convinced that
Mr. Sparrow is liable for fraud for any of the years in issue.4
We so hold.
6. Increased Rate of Interest--Section 6621(c)
Section 6621(c) applies if there is a substantial
underpayment attributable to tax-motivated transactions. The
term “tax motivated transaction” connotes a sham or fraudulent
4 We find little to no value in the testimony of the two
witnesses that respondent called at trial to support her
determination.
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