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A. Section 6653(b) and Section 6653(b)(1)
For 1980, section 6653(b), and for 1982 and 1983, section
6653(b)(1) provide for an addition to tax in an amount equal to
50 percent of any underpayment in tax if any part of such
underpayment is due to fraud.
The existence of fraud is a question of fact to be
determined on the basis of the entire record. Gajewski v.
Commissioner, 67 T.C. 181, 199 (1976), affd. without published
opinion 578 F.2d 1383 (8th Cir. 1978). The principal issue in
ascertaining whether fraud is present is whether the taxpayer has
engaged in conduct with the specific intent to evade a tax known
or believed to be properly owing. Rowlee v. Commissioner, 80
T.C. 1111, 1123 (1983).
For purposes of the section 6653(b) and section 6653(b)(1)
additions, the Commissioner bears the burden of proving, by clear
and convincing evidence, (1) that some underpayment of tax
existed for each of the years in issue and, (2) that some part of
the underpayment of tax was attributable to the taxpayer’s fraud.
Sec. 7454(a); Rule 142(b); Parks v. Commissioner, 94 T.C. 654,
660-661 (1990); Imburgia v. Commissioner, 22 T.C. 1002, 1014
(1954). Where fraud is determined for more than 1 year, the
Commissioner's burden applies separately to each year. Barbuto
v. Commissioner, T.C. Memo. 1991-342 (citing Estate of Stein v.
Commissioner, 25 T.C. 940, 959-963 (1956), affd. sub nom. Levine
v. Commissioner, 250 F.2d 798 (2d Cir. 1958)).
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