- 53 -
7. Conclusion
We conclude that payments to or on behalf of petitioners by
Resyn, Chemical Traders, and Polymer were constructive dividends
to petitioners in the years paid in the amounts determined by
respondent.
E. Whether Petitioner Is Liable For Fraud For 1963
Respondent determined that petitioner is liable for the
addition to tax for fraud under section 6653(b) for 1963 to 1970.
We discuss 1963 in this section because of certain facts
applicable only to that year. We will discuss whther petitioner
is liable for fraud for 1964 to 1970 in section F, below.
Petitioners contend that respondent did not prove that
petitioner committed fraud for 1963 because respondent did not
offer into evidence an original or copy of petitioners' 1963
return. We agree. A taxpayer is not liable for the addition to
tax for fraud for a year if the return for that year is not in
evidence and there is no evidence about the contents of the
return. Drieborg v. Commissioner, 225 F.2d 216, 219-220 (6th
Cir. 1955), affg. in part and revg. in part a Memorandum Opinion
of this Court dated Feb. 24, 1954. Secondary evidence is
admissible to prove the contents of a destroyed or lost income
tax return. Granquist v. Harvey, 258 F.2d 599, 601 (9th Cir.
1958); Estate of Clarke v. Commissioner, 54 T.C. 1149, 1163
(1970); Rubinstein v. Commissioner, 29 T.C. 861 (1958), affd. per
curiam 264 F.2d 478 (3d Cir. 1959).
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