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issues will be decided against petitioner. Rules 123(a) and (b),
142(a), 149.
Respondent, however, bears the burden of proving fraud by
clear and convincing evidence. Sec. 7454(a); Rule 142(b). In
this regard, respondent presented evidence that petitioner had
unreported income for each of the years in issue. In the course
of presenting that evidence, respondent also satisfied the burden
that is sometimes associated with determinations of unreported
income. See Portillo v. Commissioner, 932 F.2d 1128, 1133 (5th
Cir. 1991).
The addition to tax for fraud is a civil sanction intended
to safeguard the revenue and to reimburse the Government for the
heavy expense of investigation and for the loss resulting from a
taxpayer’s fraud. Helvering v. Mitchell, 303 U.S. 391, 401
(1938). Respondent has the burden of proving, by clear and
convincing evidence, an underpayment for each year and that some
part of the underpayment was due to fraud. If respondent
establishes that any portion of the underpayment is attributable
to fraud, the entire underpayment is treated as attributable to
fraud and subjected to a 75-percent addition to tax or penalty,
unless the taxpayer establishes that some part of the
underpayment is not attributable to fraud. See sec. 6653(b)(2)
for 1986, 1987, and 1988, and sec. 6663(b) for 1989 and 1990.
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Last modified: May 25, 2011