Adel Abdalla - Page 7

                                        - 7 -                                         

          her answer.  Smith v. Commissioner, 926 F.2d at 1478; Rechtzigel            
          v. Commissioner, 79 T.C. 132, 142 n.11 (1982) ("the necessary               
          effect of defaulting petitioner is to deem admitted the                     
          affirmative allegations in the answer irrespective of                       
          petitioner's denial [in the reply].  The sanction thus converts             
          the denial into an admission."), affd. 703 F.2d 1063 (8th Cir.              
          1983).  Entry of a default decision as to the additions to tax              
          for fraud (on which the Commissioner has the burden of proof) is            
          appropriate upon a determination, which is within this Court's              
          discretion, that the pleadings set forth sufficient facts to                
          support such a decision.  Smith v. Commissioner, 91 T.C. at 1058-           
          1059.                                                                       
               Based upon the pleadings in this case, there is ample                  
          support for finding that petitioner fraudulently underpaid his              
          taxes for the years in issue.  The facts contained in the answer            
          are sufficient to establish the existence of fraudulent conduct             
          by petitioner.  Prominent among the matters contained in the                
          pleadings are petitioner's admissions that:  (1) The omission of            
          specific items of income for the years in issue is part of a                
          2-year pattern of intent to evade taxes; (2) petitioner                     
          understated taxable income for those years; and (3) a part of               
          each understatement for the years in issue is due to fraud with             
          intent to evade taxes.                                                      
               The above-pleaded facts clearly establish that petitioner              
          fraudulently underpaid his income taxes for the years in issue.             



Page:  Previous  1  2  3  4  5  6  7  8  Next

Last modified: May 25, 2011