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showing that respondent comes within the exception to the period
of limitations is the same as that which she bears in sustaining
the addition to tax for fraud under section 6653(b). Botwinik
Bros. of Mass., Inc. v. Commissioner, 39 T.C. 988, 996 (1963).
The addition to tax in the case of fraud is a civil sanction
provided primarily as a safeguard for the protection of the
revenue and to reimburse the Government for the heavy expense of
investigation and the loss resulting from the taxpayer's fraud.
Helvering v. Mitchell, 303 U.S. 391, 401 (1938). For 1984 and
1985, section 6653(b)(1) provides for an addition to tax equal to
50 percent of the entire underpayment when any part of an
underpayment is due to fraud, and section 6653(b)(2) provides for
an addition to tax equal to 50 percent of the interest payable
under section 6601 for that portion of the underpayment that is
attributable to fraud. For 1986, section 6653(b)(1)(A) provides
for an addition to tax equal to 75 percent of the underpayment
attributable to fraud, and section 6653(b)(1)(B) provides for an
addition to tax equal to 50 percent of the interest payable under
section 6601 for that portion attributable to fraud.
Respondent has the burden of proving, by clear and
convincing evidence, that some part of an underpayment for each
year was due to fraud. Sec. 7454(a); Rule 142(b). For 1984 and
1985, respondent must prove the specific portion of the
underpayment of tax attributable to fraud for purposes of section
6653(b)(2). For 1986, section 6653(b)(2) provides:
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Last modified: May 25, 2011