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Respondent has shown that the amount of petitioners' income
for 1963 stated in the revenue agent's record is the same as
amounts stated on petitioners' unsigned return. However, there
is no evidence that these amounts are the same as those reported
on petitioners' 1963 return. We conclude that there is
insufficient evidence of petitioners' 1963 return to prove fraud.
Rubinstein v. Commissioner, 264 F.2d at 479.
F. Whether Petitioner Is Liable For Fraud for 1964 to 1970
1. Background
A taxpayer who commits fraud is liable for an addition to
tax equal to 50 percent of the underpayment. Sec. 6653(b).
Respondent has the burden of proving fraud by clear and
convincing evidence. Sec. 7454(a); Rule 142(b). First,
respondent must prove the existence of an underpayment. Parks v.
Commissioner, 94 T.C. 654, 660 (1990). Respondent may not rely
on petitioners' failure to carry the burden of proving the
underlying deficiency. Id. at 660-661; Petzoldt v. Commissioner,
92 T.C. 661, 700 (1989). Second, respondent must show that
petitioner intended to evade taxes he believed to be owing by
conduct intended to conceal, mislead, or otherwise prevent tax
collection. Stoltzfus v. United States, 398 F.2d 1002, 1004 (3d
Cir. 1968); Parks v. Commissioner, supra at 661; Rowlee v.
Commissioner, 80 T.C. 1111, 1123 (1983).
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