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Section 6663(a) provides that, if any part of the underpayment of
tax required to be shown on the return is due to fraud, there
shall be added to the tax an amount equal to 75 percent of the
portion of the underpayment that is attributable to fraud.
Fraud is defined as an intentional wrongdoing designed to
evade tax believed to be owing. Zell v. Commissioner, 763 F.2d
1139, 1142-1143 (10th Cir. 1985), affg. T.C. Memo. 1984-152; Webb
v. Commissioner, 394 F.2d 366, 377 (5th Cir. 1968), affg. T.C.
Memo. 1966-81, and cases cited therein. Respondent has the
burden to prove fraud for each taxable year by clear and
convincing evidence. Sec. 7454(a); Rule 142(b). Fraud is a
question of fact to be resolved upon consideration of the entire
record and is never presumed. Estate of Pittard v. Commissioner,
69 T.C. 391, 400 (1977). Respondent's burden of proving fraud
can be met by facts deemed admitted pursuant to Rule 37(c).
Doncaster v. Commissioner, 77 T.C. at 337; see Marshall v.
Commissioner, 85 T.C. 267, 272-273 (1985).
In the instant case petitioner is deemed to have admitted,
pursuant to Rule 37(c), that he attempted to conceal the source
and amount of the income that he realized from sales of illegal
drugs in 1992 and 1993 by engaging in large cash purchases,
acquiring assets through the use of nominees, and burying
$315,000 in a cemetery. In addition, petitioner is deemed to
have admitted that, in an effort to avoid prosecution for his
illegal activities, he acquired a false driver's license from the
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