- 19 -
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
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NextLast modified: May 25, 2011