Hugh Wilkinson and Evelyn Wilkinson - Page 11

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          6651(f), a fraud addition is imposed if any failure to file a                
          return is fraudulent.                                                        
               1.  Section 6653(b)(1) Addition for Underpayment of Tax                 
          for 1988                                                                     
               To impose liability under section 6653(b)(1), respondent                
          must first prove that there has been an underpayment of taxes for            
          the year in issue.  Lee v. United States, 466 F.2d 11, 16-17 (5th            
          Cir. 1972); Plunkett v. Commissioner, 465 F.2d 299, 303 (7th Cir.            
          1972), affg. T.C. Memo. 1970-274.  Section 6653(c)(1) defines                
          "underpayment" as a deficiency as defined in section 6211, except            
          that for this purpose section 6653(c)(1) provides that "the tax              
          shown on a return referred to in section 6211(a)(1)(A) shall be              
          taken into account only if such return was filed on or before the            
          last day prescribed for the filing of such return".                          
               Because petitioners did not file their 1988 Federal income              
          tax return until November 6, 1992, there is deemed to be an                  
          underpayment of tax for 1988 equal to the amount reported as due             
          on their delinquent return.  In this situation, "a taxpayer will             
          automatically create an 'underpayment' in the amount of the                  
          correct tax simply because he or she files an untimely return."              
          Emmons v. Commissioner, 92 T.C. 342, 349 (1989), affd. 898 F.2d              
          50 (5th Cir. 1990).                                                          
               2.  Fraudulent Intent                                                   
               Under sections 6653(b)(1) and 6651(f), respondent must show             
          that petitioners intended to conceal, mislead, or otherwise                  

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