- 28 -28 memberships, expensive vacation), and she admitted such at trial. See Berman v. Commissioner, T.C. Memo. 1993-629, affd. without published opinion 47 F.3d 1158 (2d Cir. 1995); Ewell v. Commissioner, T.C. Memo. 1988-265; sec. 1.6013-5(b), Income Tax Regs. She enjoyed a good life that went well beyond normal support. See Terzian v. Commissioner, 72 T.C. 1164, 1172 (1979). Issue 3. Fraud Additions to Tax and Penalty for 1986-89 The third issue for decision is whether Mrs. Zaban is liable for fraud. Respondent determined fraud additions to tax against Mrs. Zaban for 1986 and 1987 pursuant to section 6653(b)(1)(A) and (B) and for 1988 pursuant to section 6653(b)(1) and a penalty for 1989 pursuant to section 6663.6 Mrs. Zaban asserts that she lacked any actual knowledge of the unreported income items not reported in the returns for 1986 through 1989. The Commissioner has the burden of proving fraud by clear and convincing evidence. Sec. 7454(a); Rule 142(b). To establish fraud, the Commissioner must show that the taxpayer intended to evade taxes known to be owing by conduct intended to conceal, 6 For 1986 and 1987, sec. 6653(b)(1)(A) imposed an addition to tax equal to 75 percent of the portion of the underpayment attributable to fraud, and sec. 6653(b)(1)(B) imposed an addition to tax equal to 50 percent of the interest payable under sec. 6601 with respect to that portion of the underpayment. For 1988 and 1989, sec. 6653(b)(1) and sec. 6663, respectively, imposed additions to tax and penalties consisting of 75 percent of the portion of the underpayment attributable to fraud.Page: Previous 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Next
Last modified: May 25, 2011