- 31 - I. Fraud When respondent seeks to impose the addition to tax under section 6653(b),11 respondent has the burden of proof. To carry 10(...continued) paid to Gleave or for Gleave’s benefit. Respondent also determined that Gleave is liable for self-employment taxes for each of the years in issue. On brief, respondent refers to this income as being entirely dividend income. Petitioners’ contentions do not include any challenge to respondent’s implicit self-employment income determinations in the notice of deficiency, nor to issues such as Kenmore’s earnings and profits that would be relevant to a dividend characterization. See, e.g., Hagaman v Commissioner, 958 F.2d 684, 692, 695 (6th Cir. 1992), affg. and remanding T.C. Memo. 1987-549; DiLeo v. Commissioner 96 T.C. 858, 888-889 (1991), affd. 959 F.2d 16 (2d Cir. 1992). Also the parties do not discuss whether any portion of these amounts should be treated as employee compensation for Gleave’s personal services, which could affect both Gleave’s and Kenmore’s tax liabilities. In the circumstances of the instant cases, we limit ourselves on this matter to what is disputed by the parties. E.g., George R. Holswade, M.D., P.C. v. Commissioner, 82 T.C. 686, 698 (1984); Estate of Fusz v. Commissioner, 46 T.C. 214, 215 n.2 (1966). 11 Sec. 6653(b) provides, in pertinent part, as follows: SEC. 6653. FAILURE TO PAY TAX. * * * * * * * (b) Fraud.-- (1) In general.--If any part of any underpayment (as defined in subsection (c)) of tax required to be shown on a return is due to fraud, there shall be added to the tax an amount equal to 50 percent of the underpayment. (2) Additional amount for portion attributable to fraud.--There shall be added to the tax (in addition to the amount determined under paragraph (1)) an amount equal to 50 percent of the interest payable under section 6601-- (A) with respect to the portion of the underpayment described in paragraph (1) which is (continued...)Page: Previous 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Next
Last modified: May 25, 2011