- 29 -29
mislead, or otherwise prevent the collection of such taxes. Parks
v. Commissioner, 94 T.C. at 661; Rowlee v. Commissioner, 80 T.C.
1111, 1123 (1983). Fraud is never presumed, Beaver v.
Commissioner, 55 T.C. 85, 92 (1970), and cannot be imputed from one
spouse to another, Stone v. Commissioner, 56 T.C. 213, 227-228
(1971).
Respondent has failed to sustain the burden of proof.
Respondent has not established that Mrs. Zaban knew of the
understatement on petitioners' joint returns given her failure to
review any of the returns or her signing of blank returns. See
Ewell v. Commissioner, supra. Additionally, there was no evidence
presented that Mrs. Zaban was involved in preparing the returns,
other than providing documentation to the accountant, Mr. Fidati.
Even though we believe Mrs. Zaban knew of Mr. Zaban's illegal
gambling and bookmaking activities, we cannot conclude from the
record that Mrs. Zaban knew that income from such activities was
not being reported. See Flynn v. Commissioner, T.C. Memo. 1981-
491. On the basis of the entire record in this case, we are not
persuaded that Mrs. Zaban intended to evade taxes and defraud the
Government. Thus, we hold that Mrs. Zaban is not liable for the
additions to tax and penalty for fraud for 1986 through 1989.
Issue 4. Negligence or Disregard of Rules or Regulations
The fourth issue for decision is whether Mrs. Zaban is liable
for additions to tax and penalty for negligence or disregard of
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