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disproving the alleged nontaxable source, United States v.
Massei, 355 U.S. 595 (1958); Kramer v. Commissioner, 389 F.2d
236, 239 (7th Cir. 1968), affg. T.C. Memo. 1966-234; Parks v.
Commissioner, supra. Petitioners do not allege that they had
nontaxable sources of income during the years at issue. Their
known sources of income were the limousine service and sales of
leather goods.10 Petitioners have not offered any proof of
offsetting costs or expenses except those which we have allowed.
Respondent has shown by clear and convincing evidence that Mr.
Del Bosque underreported his income by $23,841 in 1988 (without
regard to the overstated long-term capital loss from the sale of
the 1 share of Fidelity Growth Fund) and $26,483 in 1989.
Respondent also has shown by clear and convincing evidence that
Mr. Jacobsen underreported his income by $27,649 in 1988. Thus,
respondent has carried the burden of establishing underpayments
of tax attributable to that omitted income each year by clear and
convincing evidence.
B. Fraudulent Intent
Respondent must prove by clear and convincing evidence that
petitioners had a fraudulent intent. Parks v. Commissioner,
supra at 664. This burden is met if it is shown that petitioners
10Petitioners asserted in their criminal tax proceedings and
at the trial in these cases that the omitted income was from
gambling. None of the parties has offered any further
description or explanation of petitioners’ gambling activities.
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