purpose of evading a tax believed to be owing, Webb v.
Commissioner, 393 F.2d 366, 377 (5th Cir. 1968), affg. T.C.
Memo. 1966-81; McGee v. Commissioner, 61 T.C. 249, 256
(1973), affd. 519 F.2d 1121 (5th Cir. 1975). Respondent
must prove that there was an underpayment, Parks v.
Commissioner, 94 T.C. 654, 660 (1990), and that the
taxpayer intended to evade taxes by conduct intended to
conceal, mislead, or otherwise prevent tax collection.
Stoltzfus v. United States, 398 F.2d 1002, 1004-1005 (3d
Cir. 1968); Parks v. Commissioner, supra at 661; Rowlee v.
Commissioner, T.C. 1111, 1123 (1983).
The first element, the existence of an understatement
of income is met. Both parties acknowledge the understate-
ment of tax liability for the years in issue.
With respect to proof of fraudulent intent on the part
of petitioner, respondent has not satisfied its burden.
The evidence set forth by respondent aims at exposing
petitioner's knowledge of the circumstances of
Mr. DiMichele's drug activities. However, nothing
submitted by respondent purports to prove petitioner's
fraudulent intent to evade income taxes. Although
petitioner did sign the fraudulent income tax return, we
find no act committed with the specific purpose of evading
income tax. The record shows that petitioner's behavior
was not focused upon committing fraud. By requiring a
showing of intent, the legal standard requires more than
simply a general knowledge of the circumstances. An
examination of the evidence on the record leaves us with
little awareness of petitioner's intentions. Petitioner
was not involved with the couple's record keeping
firsthand. Mr. DiMichele handled the couple's finances,
with the exception of the monthly checks for expenses
written by petitioner. Respondent has pointed to no single
activity which would lead us to believe that petitioner
deliberately misled the taxing authorities.
In a similar case involving the wife of a drug
trafficker, the Court wrote:
The mere fact that [the wife] was aware of her
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