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section 6501(c)(1),22 which provides that if a false or
fraudulent return is filed with the intent to evade tax, then the
tax may be assessed at any time.23 Petitioner contends that
respondent has failed to prove fraud by clear and convincing
evidence for 1983, 1984, and 1985 and thus, assessment and
collection of tax for 1983, 1984, and 1985 are barred by the
statute of limitations.
We agree with respondent as to 1985, and with petitioner as
to 1983 and 1984.
Respondent has the burden of proving the applicability of
the fraud exception to the general period of limitations.
22 SEC. 6501. LIMITATIONS ON ASSESSMENT AND COLLECTION.
* * * * * * *
(c) Exceptions.--
(1) False return.--In the case of a false or
fraudulent return with the intent to evade tax, the tax
may be assessed, or a proceeding in court for
collection of such tax may be begun without assessment,
at any time.
23 Proof that either spouse committed fraud on a joint tax
return extends the limitations period for both spouses on that
tax return, even though only one of the spouses may be liable for
the fraud addition to tax. Hicks Co. v Commissioner, 56 T.C.
982, 1030 (1971), affd. 470 F.2d 87 (1st. Cir. 1972); Stone v.
Commissioner, 56 T.C. 213, 227-228 (1971). In the joint notices
of deficiency, respondent had determined that both Betsy and
petitioner had committed fraud for 1983 through 1987. However,
in the instant cases respondent’s counsel made it plain at trial
that respondent is relying, as to the statute of limitations,
solely on the fraud determined against petitioner, and not on any
contention that Betsy committed fraud.
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