- 7 -
A. Underpayment
Where a taxpayer does not file a return, the underpayment
equals the correct tax due. See sec. 6653(c)(1). Respondent
contends that petitioner underpaid his taxes by $216,827 (i.e.,
the amount that respondent contends is the correct tax due). In
1983, petitioner reported and paid $178,191 of his 1980 tax
liability. Respondent contends that the remaining portion of the
underpayment, $38,636, was attributable to petitioner's failure
to report as income: (1) The $5,845 vacation allowance; (2) the
$328,455.37 long-term capital gain (resulting in a $79,024
increase in net capital gain income); and (3) $3,468 that
Measurex paid the IRS in satisfaction of petitioner's Federal
income tax liability. Respondent has established by clear and
convincing evidence that there is an underpayment of petitioner's
tax for 1980.
B. Fraudulent Intent
To prove fraud, respondent must establish that petitioner
intended to evade taxes through conduct designed to conceal,
mislead, or otherwise prevent the collection of taxes. Rowlee v.
Commissioner, 80 T.C. 1111, 1123 (1983). Fraudulent intent is
not to be imputed or presumed but may be established by
circumstantial evidence and reasonable inferences drawn from the
facts. Spies v. United States, 317 U.S. 492, 499 (1943);
Petzoldt v. Commissioner, supra; Stephenson v. Commissioner, 79
T.C. 995, 1006 (1982), affd. 748 F.2d 331 (6th Cir. 1984). The
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011