- 18 - Sec. 7454(a); Rule 142(b). Where fraud is determined for more than 1 year, the Commissioner's burden applies individually to each year. Barbuto v. Commissioner, T.C. Memo. 1991-342 (citing Estate of Stein v. Commissioner, 25 T.C. 940, 959-963 (1956), affd. per curiam sub nom. Levine v. Commissioner, 250 F.2d 798 (2d Cir. 1958)). To satisfy the burden of proof, the Commissioner must show two things: (1) An underpayment exists, and (2) the taxpayer intended to evade taxes known to be owing by conduct intended to conceal, mislead, or otherwise prevent the collection of taxes. Parks v. Commissioner, 94 T.C. 654, 660-661 (1990); Petzoldt v. Commissioner, 92 T.C. 661, 700 (1989). The first element requires respondent to establish the existence of an underpayment of tax. To prove the underpayment respondent cannot rely solely on petitioner's failure to discharge his burden of proving error in respondent's determination of deficiencies. Otsuki v. Commissioner, 53 T.C. 96, 106 (1969). Respondent may prove an underpayment by proving a likely source of the unreported income, Holland v. United States, 348 U.S. at 137-138, or, where the taxpayer alleges a nontaxable source, by disproving the specific nontaxable source so alleged, United States v. Massei, 355 U.S. 595 (1958). Through the bank deposits method, respondent has proven petitioner received income from his practice of radiology that he did not report on his Federal income tax returns for each of the years at issue. Additionally, petitioner took deductions forPage: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Next
Last modified: May 25, 2011