Kenneth A. Weiner - Page 11

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          B.  Section 6653(b)(1) and (2) Additions to Tax for Fraud                   
               The second issue is whether petitioner is liable for the               
          additions to tax for fraud under section 6653(b)(1) and (2).                
          The additions to tax for fraud are civil sanctions "provided                
          primarily as a safeguard for the protection of the revenue and to           
          reimburse the government for the heavy expense of investigation             
          and the loss resulting from the taxpayer's fraud."  Helvering v.            
          Mitchell, 303 U.S. 391, 401 (1938).                                         
               Fraud is defined as intentional wrongdoing on the part of              
          the taxpayer with the specific purpose of evading a tax believed            
          to be owing.  Mitchell v. Commissioner, 118 F.2d 308, 310 (5th              
          Cir. 1941), revg. 40 B.T.A. 424 (1939); Petzoldt v. Commissioner,           
          92 T.C. 661, 698 (1989).  Section 7454 provides in pertinent part           
          that "In any proceeding involving the issue whether the                     
          petitioner has been guilty of fraud with intent to evade tax, the           
          burden of proof in respect of such issue shall be upon the                  
          Secretary."  Rule 142(b) requires that this burden be carried by            
          clear and convincing evidence.  Castillo v. Commissioner, 84 T.C.           
          405, 408 (1985).                                                            
               For the fraud additions to be imposed, there must be an                
          underpayment of tax required to be shown on the return that is              
          due to fraud.  Fraud is shown by proof that the taxpayer intended           
          to conceal, mislead, or otherwise prevent the collection of his             
          or her taxes, and that there is an underpayment of tax.  Spies v.           

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