- 16 -
Commissioner, 763 F.2d 1139, 1146 (10th Cir. 1985), affg. T.C.
Memo. 1984-152.
And finally, respondent argues that petitioners' failure to
cooperate with tax authorities is evidence of fraud. We
disagree. Although there is some evidence that Dr. Wilkinson was
not fully accurate in responding to questions posed by
respondent's agent, we do not find that these inaccuracies were
the product of an intent to conceal income from respondent or
otherwise evade income taxes.
We hold that respondent has failed to prove by clear and
convincing evidence that petitioners fraudulently failed to file
their 1988 and 1989 tax returns by intending to "conceal,
mislead, or otherwise prevent the collection of the tax." See
Stoltzfus v. United States, 398 F.2d at 1004; Webb v.
Commissioner, 394 F.2d at 377. We hold for petitioners on this
issue.
D. Failure To File Timely Under Section 6651(a)
Respondent asserts in the alternative that petitioners are
liable for the section 6651(a)(1) addition to tax for their
failure to file timely 1988 and 1989 Federal income tax returns.
Pursuant to section 6651(a)(1), where a taxpayer fails to file a
tax return on the date prescribed for filing (including any
extension of time for filing), there shall be added to the tax
required to be shown on the return an amount equal to 5 percent
of that tax for each month or fraction thereof that the failure
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