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burden through affirmative evidence because fraud is never
imputed or presumed. Beaver v. Commissioner, 55 T.C. 85, 92
(1970). A taxpayer's entire course of conduct can be indicative
of fraud. Stone v. Commissioner, 56 T.C. 213, 223-224 (1971);
Otsuki v. Commissioner, 53 T.C. 96, 105-106 (1969). Furthermore,
a taxpayer's fraudulent original return is not purged by the
filing of a subsequent amended return. Badaracco v.
Commissioner, 464 U.S. 386, 394 (1984).
A. Underpayment of Tax
Petitioners admitted in their amended returns that they had
underreported, in their original returns, interest income from
foreign banks for each year in issue. Although the filing of
those amended returns is not an admission of fraudulent intent,
it is an admission of an underpayment of tax for each of those
years. See id. at 399.
B. Fraudulent Intent
Next, respondent must prove that a portion of such
underpayment for each taxable year was due to fraud.
Professional Servs. v. Commissioner, 79 T.C. 888, 930 (1982).
Fraud may be proved by circumstantial evidence because direct
proof of the taxpayer's intent is rarely available. The
taxpayer's entire course of conduct may establish the requisite
fraudulent intent. Stone v. Commissioner, 56 T.C. 213, 223-224
(1971).
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