Anthony J. Marzullo and Mary P. Marzullo - Page 19

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          spouse, the Commissioner must prove that some part of the                   
          underpayment of tax is due to the fraud of that spouse.  Hicks Co.          
          v. Commissioner, 56 T.C. 982, 1030 (1971), affd. 470 F.2d 87 (1st           
          Cir. 1972); Stone v. Commissioner, 56 T.C. 213, 227-228 (1971); see         
          sec. 6653(b)(3).  We shall first consider whether Mrs. Marzullo is          
          liable for the fraud additions for any of the years under                   
          consideration.                                                              
               Mrs. Marzullo did not sign the 1986 or 1987 tax return.                
          Moreover, she testified that she did not review petitioners' tax            
          returns and did not know about the omitted income. Respondent               
          contends that Mrs. Marzullo is liable for fraud because her                 
          testimony was not credible.  Respondent's burden of proof,                  
          however, cannot be satisfied simply by attacking Mrs. Marzullo's            
          credibility.  There is no evidence in the record proving that Mrs.          
          Marzullo actually knew that income from MPM had been underreported.         
          Further, there is no evidence in the record proving that Mrs.               
          Marzullo knew of the omission of her husband's income from the              
          College.  We therefore hold that Mrs. Marzullo is not liable for            
          the additions to tax for fraud for any of the years under                   
          consideration.                                                              
               We now consider whether Mr. Marzullo is liable for the fraud           
          addition for 1986.  Petitioners argue that Mr. Marzullo should not          
          be liable for the fraud addition for 1986, contending that he did           
          not abuse the accounts payable account at the College in 1986, in           
          contrast to his use of the account in 1987 and 1988.  Respondent            




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