- 49 -
We now turn to respondent's additions to tax under section
6653(b)(2). Section 6653(b)(2) imposes an addition to tax equal
to 50 percent of the interest payable on the portion of the
understatement attributable to fraud. Respondent must prove the
portion of the understatement attributable to fraud. Sec.
6653(b)(2); DiLeo v. Commissioner, 96 T.C. 858, 873 (1991), affd.
959 F.2d 16 (2d Cir. 1992).
Respondent asserts that the following amounts of income that
petitioner failed to report on his 1982, 1983, and 1984 returns,
respectively, are attributable to fraud for purposes of section
6653(b)(2):
1982 1983 1984
Partnership fee income $624,000 $1,095,626.00 $291,700.00
Newtowne 31,014 1,282,500.00 -0-
Park Place -0- -0- 180,000.00
Saltergate 120,000 -0- -0-
Cost savings -0- 106,037.66 230,657.69
Bad debt deduction -0- -0- 2,035,424.00
Ford Van 7,800 -0- -0-
Total 782,814 2,484,163.66 2,737,781.69
(1) Partnership Fee Income
We have concluded that petitioner failed to report
$624,000, $806,076, and $273,700 in partnership fee income for
1982, 1983, and 1984, respectively. Now we must determine what
portion, if any, of each underpayment is attributable to fraud.
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