- 9 -
or "badges", which tend to establish the existence of fraud. See
Clayton v. Commissioner, supra at 647.
Respondent argues that petitioners were fully aware of their
obligation to pay Federal income tax on their income for the
years at issue since they paid tax on the same type of income in
previous years. Respondent contends that petitioners'
underpayment for 1991 is attributable to a fraudulent procurement
of a refund of withheld taxes. Respondent further asserts that
petitioners' omission of Social Security numbers on the submitted
Forms 1040-NR was intended to mislead respondent.
We find that the badges of fraud are not sufficiently
present in the facts of this case. First, petitioners filed what
they believed, albeit erroneously, to be the proper forms. We
note that respondent accepted these forms as a valid filing and
continues to rely upon such acceptance as a basis for the section
6651(a) failure to file addition to tax for 1991. Second,
petitioner husband did not attempt to stop the withholding of
taxes from his paychecks. Third, petitioner husband's omission
of his Social Security number from his Form 1040-NR does not
amount to concealment since it was listed on his submitted Form
W-2. If his intent was to conceal this information, he would not
have disclosed it to respondent in this way. We recognize that,
absent respondent's acceptance of this Form 1040-NR, the mere
attachment of a Form W-2 would not remedy a form which was
otherwise invalid for lack of sufficient information by which tax
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011