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Issue 4. Additions to Tax for Fraud
Respondent determined that petitioner was liable for
additions to tax for fraud in each year in issue. Petitioner
disputes this determination. Respondent must prove that
petitioner underpaid his taxes in each of the subject years, and
that some part of each underpayment was due to fraud, in order to
sustain her allegations of fraud under: (1) Section 6653(b), for
petitioner's 1980 and 1981 taxable years,22 and (2) section
6653(b)(1), for petitioner's 1982 taxable year.23 See secs.
22 As applicable to petitioner's 1980 and 1981 taxable
years, sec. 6653(b) provides: "If any part of any underpayment
* * * of tax required to be shown on a return is due to fraud,
there shall be added to the tax an amount equal to 50 percent of
the underpayment."
23 Sec. 325(a) of the Tax Equity and Fiscal Responsibility
Act of 1982, Pub. L. 97-248, 96 Stat. 616-617, amended sec.
6653(b) effective for taxes the last day prescribed by law for
the payment of which, without regard to extensions, was after
Sept. 3, 1982. Following its amendment, sec. 6653(b) provides in
relevant part:
(1) In general.--If any part of any underpayment * * *
of tax required to be shown on a return is due to fraud,
there shall be added to the tax an amount equal to 50
percent of the underpayment.
(2) Additional amount for portion attributable to
fraud.--There shall be added to the tax (in addition to the
amount determined under paragraph (1)) an amount equal to
50 percent of the interest payable under section 6601--
(A) with respect to the portion of the
underpayment described in paragraph (1) which is
attributable to fraud, and
(B) for the period beginning on the last day
prescribed by law for payment of such underpayment
(continued...)
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