Harold Wapnick - Page 5

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          material fact for trial and cannot rest upon mere allegations or            
          denials.  Brotman v. Commissioner, 105 T.C. 141, 142 (1995).                
          Moreover, summary judgment may be used to establish matters                 
          covered by collateral estoppel.  Id.                                        
               For 1985, section 6653(b)(1) provides that if any part of an           
          underpayment is due to fraud, there shall be an addition to the             
          tax equal to 50 percent of the underpayment.  For 1986 and 1987,            
          section 6653(b)(1)(A) provides for an addition to tax equal to 75           
          percent of the portion of the underpayment that is attributable             
          to fraud.  Section 6653(b)(2)2  provides that there shall be                
          added to the tax an amount equal to 50 percent of the interest              
          due on the portion of the underpayment attributable to fraud.               
               Fraud is defined as an intentional wrongdoing with a                   
          specific intent to evade a tax believed to be owing.  Zell v.               
          Commissioner, 763 F.2d 1139, 1142-1143 (10th Cir. 1985), affg.              
          T.C. Memo. 1984-152.  Respondent has the burden of proving by               
          clear and convincing evidence both (i) an underpayment and (ii)             
          that some portion of the underpayment is due to fraud.  Sec.                
          7454(a); Rule 142(b); Parks v. Commissioner, 94 T.C. 654, 660-661           
          (1990).                                                                     
               As noted, respondent contends that petitioner's prior                  
          criminal conviction under section 7201 collaterally estops him              
          from denying that there is an underpayment of income tax for each           


               2    For 1986 and 1987, sec. 6653(b)(1)(B).                            




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