- 67 -
1981, and 1982, which taxes Gleave knew or believed he owed, by
conduct intended to conceal, mislead, or otherwise prevent the
collection of taxes.
We hold for respondent on this issue.18
C. Additional Amount for Portion Attributable to Fraud
The additional amount added to the tax under section
6653(b)(2) is equal to 50 percent of the interest payable under
section 6601 and applies only to the portion of the underpayment
that is attributable to fraud. In the notices of deficiency
respondent determined that this additional amount applies to the
entire deficiencies determined against Kenmore for its fiscal
1982, and Gleave for 1982. Respondent has the burden of proving
by clear and convincing evidence what portion of the deficiency
is attributable to fraud. Sec. 7454(a); Rule 142(b).19
18 Because of our holding on this issue, we do not reach
the alternative contention that Gleave is liable for additions to
tax, under secs. 6651 (failure to timely file tax returns) and
6653(a)(negligence, etc.), which respondent asserted in the
answer.
19 Sec. 1503(a) of TRA 86, 100 Stat. 2742, amended sec.
6653(b)(2) to provide as follows:
SEC. 6653. ADDITIONS TO TAX FOR NEGLIGENCE AND FRAUD.
* * * * * * *
(b) Fraud.--
* * * * * * *
(2) Determination of portion attributable to
fraud.--If the Secretary establishes that any portion
of an underpayment is attributable to fraud, the entire
underpayment shall be treated as attributable to fraud,
(continued...)
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