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statutory notice of deficiency, respondent's trial memorandum, or
respondent's brief as to the particular charitable contributions
against which respondent asserts the fraud penalty.
Section 6663(b) provides that if respondent establishes that
any part of any underpayment of tax required to be shown on a
return is due to fraud, the entire underpayment shall be treated
as attributable to fraud and subjected to a 75 percent penalty
unless the taxpayer establishes, by the preponderance of the
evidence, that some part of the underpayment is not attributable
to fraud. Respondent bears the burden to prove by clear and
convincing evidence: (1) An underpayment of tax by the taxpayer;
and (2) that some part of the underpayment is due to fraud. Sec.
7454(a); Rule 142(b); Clayton v. Commissioner, 102 T.C. 632, 646
(1994); King's Court Mobile Home Park, Inc. v. Commissioner, 98
T.C. 511, 515-516 (1992). We have already decided that
petitioners underpaid their Federal income taxes for 1991 and
1992 due to: (1) Petitioners' concessions regarding the claimed
real estate tax deduction and unreported interest income, and (2)
our holdings that they are not entitled to the entire amounts of
the claimed charitable contribution or any casualty loss
deductions. Therefore, we address whether such underpayments are
due to fraud.
Fraud is established by proving that a taxpayer intended to
evade tax believed to be owing by conduct intended to conceal,
mislead, or otherwise prevent the collection of such tax.
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