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(1) Kenmore
In part I.A. of this opinion, we considered the parties’
disputes as to the amounts of Kenmore’s income in order to
determine whether respondent proved by clear and convincing
evidence that Kenmore has an underpayment of tax. After
examining the evidence in the record, we concluded that
respondent carried this burden of proof for each of the years in
issue. This conclusion applies also to our consideration of the
additional addition to tax under section 6653(b)(2) for Kenmore’s
fiscal 1982.
In particular, we conclude that respondent has proven by
clear and convincing evidence that (consistent with our holding
supra in part I.A.) Kenmore omitted from taxable income
$345,556.67 for its fiscal 1982 (supra table 4), and that the
underpayment of tax resulting from this omission is attributable
to fraud.
We hold for respondent as to the amount of underpayment
resulting from this omission; we hold for petitioner as to any
other amount of underpayment for 1982.
19(...continued)
except with respect to any portion of the underpayment
which the taxpayer establishes is not attributable to
fraud.
This amendment placed the burden of proof on the taxpayer to
establish that a portion of the deficiency was not attributable
to fraud. The amendment applies to tax returns the due date of
which is after Dec. 31, 1986, and so does not affect the instant
cases.
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