- 7 -
payments from Brockland Pontiac as income. Mr. Welker also
admitted that he did not believe that his tax returns for the
years in issue, as well as 1983, were true and correct as to
every material matter. On December 14, 1990, as a result of Mr.
Welker's plea of guilty in the criminal tax case, the United
States District Court for the Southern District of Illinois found
Mr. Welker guilty of violating section 7206(1) for 1984 and 1986.
OPINION
Addition to Tax for Fraud
The addition to tax in the case of fraud is a civil sanction
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 a taxpayer's fraud.
Helvering v. Mitchell, 303 U.S. 391, 401 (1938). Fraud is
intentional wrongdoing on the part of the taxpayer with the
specific purpose to evade a tax believed to be owing. McGee v.
Commissioner, 61 T.C. 249, 256 (1973), affd. 519 F.2d 1121 (5th
Cir. 1975).
The Commissioner has the burden of proving fraud by clear
and convincing evidence. Sec. 7454(a); Rule 142(b). To satisfy
the burden of proof, the Commissioner must show: (1) An
underpayment exists; and (2) the taxpayer intended to evade taxes
known to be owing by conduct intended to conceal, mislead, or
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011