7
Fraud, as used in section 6653(b), means actual intentional
wrongdoing. Mitchell v. Commissioner, 118 F.2d 308 (5th Cir.
1941), revg. 40 B.T.A. 424 (1939). The intent required is the
specific purpose to violate a known legal duty, in this case, to
evade a tax believed to be owing. Stoltzfus v. United States,
supra; Estate of Temple v. Commissioner, 67 T.C. 143, 159 (1976).
Where direct evidence of fraudulent intent is not available, its
existence may be determined from the conduct of the taxpayer and
the surrounding circumstances. Stone v. Commissioner, 56 T.C.
213 (1971). The Supreme Court has stated that an "affirmative
willful attempt may be inferred from * * * any conduct, the
likely effect of which would be to mislead or to conceal". Spies
v. United States, 317 U.S. 492, 499 (1943). Making false
statements to a revenue agent is evidence of fraud. United
States v. Beacon Brass Co., 344 U.S. 43 (1952); United States v.
Newman, 468 F.2d 791, 794 (5th Cir. 1972).
In the instant case, we need not rely on any presumption of
correctness as to the deficiency in order to conclude that fraud
has been committed by petitioners. They have admitted the
receipt of the unreported income, and it is clear from the facts
that an income tax was owing thereon, which has not been paid.
We are convinced that petitioners' failure to file returns or pay
the required tax was fraudulent on their part. The tax was
clearly owing, and petitioners, without any excuse, intentionally
did not file the returns and pay the tax. In addition, during
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