- 27 -
respondent has failed to present clear and convincing evidence of
such knowledge. Aside from her status as petitioner's spouse,
the record is essentially devoid of evidence concerning Linda.
Not only has respondent failed to establish fraud on the
part of Linda with respect to taxable years 1987 and 1988; she
has likewise failed with respect to taxable year 1989. Although
the doctrine of collateral estoppel prevents petitioner from
contesting the civil fraud penalty with respect to taxable year
1989, the doctrine does not effect an estoppel against Linda
because she was not a party to the prior criminal proceeding.
Randolph v. Commissioner, 74 T.C. 284 (1980); Stone v.
Commissioner, supra.
In sum, the facts of this case clearly and convincingly
establish that petitioner, but not his spouse, had an intent to
evade the Federal income tax with respect to each year at issue.
Accordingly, we find that petitioner is liable for the addition
to tax for fraud under section 6653(b)(1) for taxable years 1987
and 1988. We also find that petitioner is liable for the civil
fraud penalty under section 6663 for taxable year 1989. We
further find that Linda is not liable for the civil fraud
addition to tax under section 6653(b)(1) for taxable years 1987
or 1988; nor is Linda liable for the civil fraud penalty under
section 6663 for taxable year 1989.
Page: Previous 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NextLast modified: May 25, 2011