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determine whether petitioner is liable for the additions to tax
for fraud with respect to 1984 and 1985.
A. Underpayment
The record provides sufficient evidence that for 1984 and
1985 petitioner omitted significant amounts of income and
underpaid his taxes. As stated earlier, petitioner is liable for
self-employment tax because he failed to meet his burden of
proof. Rule 142(a). While respondent determined that petitioner
underpaid his taxes by $78,807.11 for 1984 and $41,092.63 for
1985, she failed to produce clear and convincing evidence that
petitioner's income was derived from self-employment. As a
result, these underpayments must be reduced accordingly.
B. Fraudulent Intent
To prove fraud, respondent must establish that petitioner
intended to evade taxes. This intent may be established by
conduct designed to conceal, mislead, or otherwise prevent the
collection of taxes. Korecky v. Commissioner, 781 F.2d 1566,
1568 (11th Cir. 1986), affg. T.C. Memo. 1985-63; Rowlee v.
Commissioner, 80 T.C. 1111, 1123 (1983). Fraudulent intent is
not to be imputed or presumed but rather must be established by
some independent evidence. Beaver v. Commissioner, 55 T.C. 85,
92 (1970); Otsuki v. Commissioner, 53 T.C. 96, 106 (1969).
Because direct proof of the taxpayer's intent is rarely
available, fraudulent intent may be established by circumstantial
evidence and reasonable inferences drawn from the facts. Spies
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