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concealment of assets are additional indicia of fraud. See Meier
v. Commissioner, supra.
Petitioners contend that even if this Court finds that the
fraud penalty can be properly imposed against that portion of the
deficiency arising from petitioner's personal use of the
partnership's checking account, this Court must nevertheless find
that the fraud penalty cannot be properly imposed against that
portion of the deficiency resulting from the cashier's checks.
We disagree. Petitioners' argument in this regard is wanting in
substance. Petitioners have offered no credible evidence to
refute respondent's proof of fraud with respect to any portion of
the understatements. Hence, section 6653(b)(2) can provide
petitioners with no refuge.
Although we conclude that the record provides ample basis
for finding that the entire underpayment of tax for each taxable
year at issue is due to fraud on the part of petitioner, the
record lacks a sufficient basis for us to conclude that any
portion of the underpayment for any taxable year at issue was due
to fraud on the part of petitioner Linda Walters (Linda). The
fraud of one spouse cannot be attributed to the other spouse.
Stone v. Commissioner, 56 T.C. 213 (1971). Respondent has the
burden of proving by clear and convincing evidence that Linda
intended to evade taxes. Rule 142(b); Stone v. Commissioner,
supra. Respondent has not met this burden. While Linda may have
known, or had reason to know, of petitioner's tax evasion scheme,
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