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Fraud Penalty
Respondent determined that petitioner fraudulently
omitted income from his individual 1991 and 1992 returns on
which there are underpayments of $10,488, and $10,600,
respectively. Respondent determined that the entire
underpayment for each of the years 1991 and 1992 is
attributable to fraud. Therefore, respondent determined
that petitioner is liable for civil fraud penalties under
section 6663 of $7,866 and $7,950, respectively.
Respondent also determined that petitioners
fraudulently omitted income from their joint 1993 return
on which there is an underpayment of $32,114. As to 1993,
respondent also determined that the entire underpayment
is attributable to fraud and that some part of the
underpayment is due to the fraud of both petitioners.
Therefore, respondent determined that petitioners are both
liable for a civil fraud penalty under section 6663 of
$24,086 for 1993.
Section 6663(a) provides that, if any part of an
underpayment is due to fraud, there shall be added to the
tax an amount equal to 75 percent of the portion of the
underpayment which is attributable to fraud. The
Commissioner bears the burden of proving by clear and
convincing evidence: (1) An underpayment exists; and (2)
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