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Cir. 1949), affg. 7 T.C. 245 (1946); Niedringhaus v. Commissioner,
99 T.C. 202, 211 (1992).
Fraud cannot be imputed from one spouse to another. In the
case of a joint return, section 6653(b)(4) (for taxable years 1984
and 1985) and section 6653(b)(3) (for taxable year 1986) provide
that section 6653(b) shall not apply with respect to a spouse
unless some part of the underpayment is due to fraud by such
spouse. Hence, respondent must prove fraud as to each spouse
charged with liability for the addition to tax. Hicks Co. v.
Commissioner, 56 T.C. 982, 1030 (1971), affd. 470 F.2d 87 (1st Cir.
1972); Stone v. Commissioner, 56 T.C. 213, 227-228 (1971). We
shall first address whether any part of the underpayment for the
years under consideration is due to petitioner's fraud.
a. Petitioner
Petitioner claims that the understatements and deductions on
the returns for the years under consideration were not fraudulent,
but rather resulted from his honest mistakes. He claims that
mistakes were made because he thought every expense was deductible
and that the IRS audited all returns and corrected any inaccurate
items listed on the returns. We find petitioner's claim to be
self-serving and, at least in part, incredible.
Respondent has affirmatively established numerous badges of
fraudulent intent by petitioner as follows:
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