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restitution in the amount of $115,564.30 or the amount of tax
liability, whichever was less.
On March 16, 1994, respondent issued notices of deficiency
to the Gilchrists and Door Control.
OPINION
Respondent determined that petitioners were liable for
additions to tax for fraud under section 6653(b)(1)(A) and (B) as
in effect for 1986 and 1987, and section 6653(b)(1) as in effect
for 1988. Respondent also determined that Door Control was
liable for an addition to tax for fraud under section 6653(b)(1)
as in effect for 1985.
Fraud is defined as an intentional wrongdoing designed to
evade tax. Powell v. Granquist, 252 F.2d 56, 60 (9th Cir. 1958);
Miller v. Commissioner, 94 T.C. 316, 332 (1990). The existence
of fraud is a question of fact to be resolved upon consideration
of the entire record. Loftin & Woodard, Inc. v. United States,
577 F.2d 1206, 1236 (5th Cir. 1978); Gajewski v. Commissioner, 67
T.C. 181, 199 (1976), affd. without published opinion 578 F.2d
1383 (8th Cir. 1978). Respondent bears the burden of proving
fraud by clear and convincing evidence. Sec. 7454(a); Rule
142(b). To carry her burden of proof, respondent must show that
(1) an underpayment of tax exists and (2) some portion of the
underpayment is due to fraud. Petzoldt v. Commissioner, 92 T.C.
661, 699 (1989). Where respondent determines fraud for several
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