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Specifically, respondent contends that petitioner fraudulently
omitted the interest earned on the foreign account from income
for each taxable year at issue. In contrast, petitioner
maintains that his failure to report the interest was not
fraudulent, but rather the result of his failure to appreciate
the income tax reporting requirements governing interest earned
on foreign accounts.
Respondent bears the burden of proving fraud by clear and
convincing evidence. Sec. 7454(a); Rule 142(b). The burden that
respondent bears in proving fraud under section 6653(b) or
section 6501(c)(1) is one and the same. Estate of Temple v.
Commissioner, 67 T.C. 143, 159-160 (1976). Respondent must
establish that petitioner underpaid his taxes for each taxable
year at issue and that some part of that underpayment was due to
petitioner's intent to conceal, mislead, or otherwise prevent the
collection of such taxes. Parks v. Commissioner, 94 T.C. 654,
660-661 (1990); Hebrank v. Commissioner, 81 T.C. 640, 642 (1983).
Fraud is defined as an intentional wrongdoing designed to
evade tax believed to be owing, effectuated by conduct designed
to conceal, mislead, or otherwise prevent the collection of such
tax. Webb v. Commissioner, 394 F.2d 366, 377 (5th Cir. 1968),
affg. T.C. Memo. 1966-81; Mitchell v. Commissioner, 118 F.2d 308,
310 (5th Cir. 1941), revg. 40 B.T.A. 424 (1939); Estate of
Pittard v. Commissioner, 69 T.C. 391 (1977); McGee v.
Commissioner, 61 T.C. 249, 256 (1973), affd. 519 F.2d 1121 (5th
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