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Although not dispositive, a conviction for filing false
Federal income tax returns under section 7206(1) is evidence of
fraudulent intent. Wright v. Commissioner, 84 T.C. 636, 643-644
(1985).
Where false or fraudulent Federal income tax returns are
filed with an intent to evade tax, the normal 3-year period of
limitation on assessment does not apply. Sec. 6501(c). Also,
the 3-year period of limitation on assessment does not begin to
run unless a taxpayer’s Federal income tax return is delivered to
and received by respondent. Walden v. Commissioner, 90 T.C. 947,
951 (1988).
Where a joint Federal income tax return was filed, a finding
that fraud was committed by either spouse keeps the period of
limitation on assessment open with respect to both spouses.
Vannaman v. Commissioner, 54 T.C. 1011, 1018 (1970).
Generally, taxpayers bear the burden of proving that they
are entitled to claimed deductions. Rule 142(a); Welch v.
Helvering, 290 U.S. 111, 115 (1933). Taxpayers are expected to
maintain adequate records to substantiate claimed deductions.
Sec. 6001. In carrying on a trade or business, only ordinary and
necessary business expenses are deductible. Sec. 162(a).
For 1982 and 1983, petitioners argue that they did not
fraudulently intend to evade their correct Federal income tax
liabilities. Petitioners argue that the reductions petitioner
made to the rental income on the summary sheets were based on
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Last modified: May 25, 2011