Robin F. and Anne F. Jenkins - Page 12

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            6653(b)(1)(B) provides for additional interest on the portion of                           
            the underpayment attributable to fraud.                                                    
                  Under section 6653(b)(1), applicable to 1984 and 1985, if                            
            respondent proves that any part of the underpayment is attributable                        
            to fraud, the addition to tax imposed by that section applies to                           
            the entire underpayment, regardless of whether petitioners show                            
            that some part of the underpayment is not attributable to fraud.                           
            Sec. 6653(b)(1).  Under section 6653(b)(1)(A) and (B), applicable                          
            to 1986, if respondent establishes that any portion of an                                  
            underpayment is attributable to fraud, the entire underpayment is                          
            to be treated as attributable to fraud, except with respect to any                         
            portion of the underpayment that petitioners establish is not                              
            attributable to fraud. Sec. 6653(b)(2).                                                    
                  Fraud is intentional wrongdoing on the part of the taxpayer                          
            with the specific purpose to evade a tax believed to be owing.                             
            McGee v. Commissioner, 61 T.C. 249, 256 (1973), affd. 519 F.2d 1121                        
            (5th Cir. 1975).  To support fraud, respondent has the burden of                           
            proving, by clear and convincing evidence, that petitioners have an                        
            underpayment for each year, and that some part of the underpayment                         
            is due to fraud.  Sec. 7454(a); Rule 142(b); Katz v. Commissioner,                         
            90 T.C. 1130, 1143 (1988); Otsuki v Commissioner, 53 T.C. 96, 105                          
            (1969).  This burden is met if respondent shows that petitioners                           
            intended to evade taxes known to be owing by conduct intended to                           
            conceal income, mislead, or otherwise prevent the collection of                            






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