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constructive dividend income (supra table 19) was omitted because
of petitioner’s fraud.
We hold for respondent as to 1986.
C. Conclusions
We conclude that respondent has shown by clear and
convincing evidence that petitioner intended to evade his income
taxes for each of the years 1985 and 1986, which taxes petitioner
knew or believed he owed, by conduct intended to conceal this
income.
Accordingly, the statute of limitations does not bar
respondent’s assessment of deficiencies against petitioner for
1985. Sec. 6501(c)(1).
We hold for respondent with respect to 1985, and for
petitioner with respect to 1983 and 1984, on this statute of
limitations issue.
II. Additions to Tax
A. Fifty-Percent Fraud Addition--1985
In order to impose the 50-percent fraud addition to tax for
1985 under section 6653(b)(1),33 respondent must prove, by clear
33 Sec. 6653(b) for 1985 provides, in pertinent part, as
follows:
SEC. 6653. FAILURE TO PAY TAX.
* * * * * * *
(b) Fraud.--
(continued...)
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