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Respondent determined an addition to tax for fraud under section
6653(b) in the amount of $54,022.86. Respondent issued the
notice of deficiency for taxable year 1967 on February 5, 1993.OPINION
This is a fraud case in which respondent must prove fraud by
clear and convincing evidence, and petitioner must prove any
error in the deficiency determinations by a preponderance of the
evidence. Zack v. Commissioner, 692 F.2d 28, 29 (6th Cir. 1982),
affg. T.C. Memo. 1981-700; sec. 7454(a); Rule 142. If respondent
does not prove fraud for the taxable year 1966, the statute of
limitations will bar the assessment of the deficiency and
additions to tax for that year. Sec. 6501(a) and (c)(1).
Petitioner is collaterally estopped to deny fraud for the taxable
year 1967 since he pleaded guilty to tax evasion pursuant to
section 7201 for that year. Amos v. Commissioner, 360 F.2d 358
(4th Cir. 1965), affg. 43 T.C. 50 (1964); Arctic Ice Cream Co. v.
Commissioner, 43 T.C. 68 (1964). Moreover, petitioner failed to
file a tax return for 1967, so a tax deficiency and addition to
tax may be assessed "at any time". Sec. 6501(c)(3). Thus, for
reasons of fraud and failure to file a return, no limitations
period applies to 1967. Sec. 6501(c)(1) and (3).
Fraud
5(...continued)
Income from car sales 55,535.00
Total income $204,565.00
Total expenses - 56,036.34
Net income $148,528.66
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Last modified: May 25, 2011