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revenue and to reimburse the Government for the heavy expense of
investigation and the loss resulting from a taxpayer's fraud.
Helvering v. Mitchell, 303 U.S. 391, 401 (1938). Fraud is
intentional wrongdoing on the part of the taxpayer with the
specific purpose to evade a tax believed to be owing. McGee v.
Commissioner, 61 T.C. 249, 256 (1973), affd. 519 F.2d 1121 (5th
Cir. 1975).
The Commissioner has the burden of proving fraud by clear
and convincing evidence. Sec. 7454(a); Rule 142(b). To satisfy
his burden of proof, the Commissioner must show: (1) An
underpayment exists; and (2) the taxpayer intended to evade taxes
known to be owing by conduct intended to conceal, mislead, or
otherwise prevent the collection of taxes. See Parks v.
Commissioner, 94 T.C. 654, 660-661 (1990). The Commissioner must
meet this burden through affirmative evidence because fraud is
never imputed or presumed. Beaver v. Commissioner, 55 T.C. 85,
92 (1970).
A. Underpayment of Tax
Petitioner conceded that he underreported income for 1989
and 1990. We are satisfied that the Commissioner has established
by clear and convincing evidence an underpayment of tax by
petitioner for each of the years in issue.
B. Fraudulent Intent
The Commissioner must also prove that a portion of the
underpayment was due to fraud. Professional Servs. v.
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