Leslie R. Barth - Page 17

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                  Petitioner also has the burden of proof with respect to the                           
            addition to tax under section 6654 for 1977.  That addition to                              
            tax is mandatory, absent exceptions not shown to exist here.                                
            Grosshandler v. Commissioner, 75 T.C. 1, 20-21 (1980).                                      
            Respondent's determination in that regard must also be sustained.                           
                  The addition to tax in the case of fraud is a civil sanction                          
            provided primarily as a safeguard for the protection of the                                 
            revenue and to reimburse the Government for the heavy expense of                            
            investigation and the loss resulting from the taxpayer's fraud.                             
            Helvering v. Mitchell, 303 U.S. 391, 401 (1938).  Respondent has                            
            the burden of proving, by clear and convincing evidence, that                               
            some part of an underpayment for each year was due to fraud.                                
            Sec. 7454(a); Rule 142(b).  This burden is met if it is shown                               
            that the taxpayer intended to evade taxes known to be owing by                              
            conduct intended to conceal, mislead, or otherwise prevent the                              
            collection of such taxes.  Stoltzfus v. United States, 398 F.2d                             
            1002, 1004 (3d Cir. 1968); Webb v. Commissioner, 394 F.2d 366,                              
            377 (5th Cir. 1968), affg. T.C. Memo. 1966-81.                                              
                  The existence of fraud is a question of fact to be resolved                           
            upon consideration of the entire record.  Gajewski v.                                       
            Commissioner, 67 T.C. 181, 199 (1976), affd. without published                              
            opinion 578 F.2d 1383 (8th Cir. 1978).  Fraud will never be                                 
            presumed.  Beaver v. Commissioner, 55 T.C. 85, 92 (1970).  Fraud                            
            may, however, be proved by circumstantial evidence because direct                           
            proof of the taxpayer's intent is rarely available.  The                                    

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