- 142 -
and convincing evidence, that petitioner has an underpayment of
tax for that year, and that some part of that underpayment is due
to fraud. Sec. 7454(a); Rule 142(b). Our conclusion as to the
statute of limitations issue results in our concluding that
respondent has carried this burden of proof as to the 50-percent
fraud addition to tax for 1985.
We hold for respondent on this issue with respect to 1985.
B. Additional Amount for Portion Attributable to Fraud--1985
The additional amount added to the tax under section
6653(b)(2) is equal to 50 percent of the interest payable under
33(...continued)
(1) In general.--If any part of any underpayment
(as defined in subsection (c)) 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
(determined without regard to any extension) and
ending on the date of the assessment of the tax
(or, if earlier, the date of the payment of the
tax).
This provision was amended by sec. 1503 of the Tax Reform Act of
1986 (TRA 86), Pub. L. 99-514, 100 Stat. 2085, 2742. See infra
note 35.
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