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distributions from the corporation for his benefit; that he knew
that these distributions were income to him; and that his failure
to file returns, to report the income, and to pay tax on that
income was due to fraud. Therefore, respondent has established
these elements by clear and convincing evidence, and the
additions to tax under section 6653(b)(1) for 1982, 1983, 1984,
and 1985 and under section 6653(b)(1)(A) and (B) for 1986 will be
sustained.
It is not clear, however, that petitioner knew or should
have known that the payments withdrawn from the corporation by
his son would be taxable to him as constructive dividends. With
respect to those amounts for 1982, 1983, 1984, and 1985,
respondent has not satisfied her burden of proving that
petitioner's failure to report the amounts paid for his son and
to pay tax on them was due to fraud. Therefore, we do not
sustain the 50 percent of the interest portion attributable to
those payments under section 6653(b)(2) for those years. See
Franklin v. Commissioner, T.C. Memo. 1993-184. On the other
hand, petitioner has not satisfied his burden of proving, for
1986, that the omissions with respect to distributions for the
benefit of his son were not due to fraud. See sec. 6653(b)(2),
quoted above.
Because we have upheld respondent's determination with
respect to the additions to tax for fraud, we need not address
the alternative additions to tax for negligence and for failure
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