-41-
issue and that some portion of the underpayment is due to fraud.
Sec. 7454(a); Rule 142(b). To meet this burden, respondent must
show that petitioner intended to evade taxes known to be owing by
conduct intended to conceal, mislead, or otherwise prevent the
collection of taxes. Stoltzfus v. United States, 398 F.2d 1002
(3d Cir. 1968); Webb v. Commissioner, 394 F.2d 366 (5th Cir.
1968), affg. T.C. Memo. 1966-81; Rowlee v. Commissioner, 80 T.C.
1111, 1123 (1983).
The existence of fraud is a question of fact to be resolved
upon consideration of the entire record. Estate of Pittard v.
Commissioner, 69 T.C. 391 (1977); Gajewski v. Commissioner, 67
T.C. 181, 199 (1976), affd. without published opinion 578 F.2d
1383 (8th Cir. 1978). Fraud is not to be imputed or presumed,
but it must be established by some independent evidence of
fraudulent intent. Beaver v. Commissioner, 55 T.C. 85, 92
(1970); Otsuki v. Commissioner, 53 T.C. 96 (1969). Fraud may not
be found under "circumstances which at the most create only
suspicion." Davis v. Commissioner, 184 F.2d 86, 87 (10th Cir.
1950); Petzoldt v. Commissioner, 92 T.C. 661, 700 (1989).
However, fraud may be proved by circumstantial evidence and
reasonable inferences drawn from the facts because direct proof
of the taxpayer's intent is rarely available. Spies v. United
States, 317 U.S. 492 (1943); Rowlee v. Commissioner, supra;
Stephenson v. Commissioner, 79 T.C. 995 (1982), affd. per curiam
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