William Kale - Page 19

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          the IRS for nearly 30 years, reaching the highest possible grade            
          allowed to nonmanagement agents, and was fully aware that those             
          bribes are includable in income and should have been reported on            
          his Federal tax returns.  Petitioner did not report those bribes.           
          He did not maintain any records of the bribes.  All in all, we              
          find that petitioner’s entire course of conduct reveals that he             
          willfully intended to prevent the collection of tax he knew was             
          owing on the illegal bribe income.  We therefore find that the              
          full amount of the underpayment for each year is attributable to            
          petitioner's fraud.  Accordingly, we sustain respondent's                   
          determination of additions to tax under sections 6653(b) and                
          section 6653(b)(1).                                                         
          B. Section 6653(b)(2)                                                       
               Under section 6653(b)(2), an addition to tax equal to 50               
          percent of the interest payable under section 6601 is imposed on            
          the portion of the underpayment attributable to fraud.                      
          Respondent bears the burden of proving by clear and convincing              
          evidence the specific portion of the underpayment due to fraud in           
          each year.  DiLeo v. Commissioner, 96 T.C. 858, 873 (1991), affd.           
          959 F.2d 16 (2d Cir. 1992).  Accordingly, to adjudicate an                  
          addition to tax under section 6653(b)(2), first we must examine             
          the evidence and satisfy ourselves as to the amount that clearly            
          and convincingly is an underpayment.  Then, we must determine               
          whether any or all of such amount clearly and convincingly is due           






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