-12-
C. Whether Petitioner Is Liable for the Addition to Tax for
Fraud
1. Background
Respondent determined that petitioner is liable for the
addition to tax for fraud under section 6653(b) for 1984. For
1984, if any part of a tax underpayment is due to fraud, the
addition to tax for fraud under section 6653(b)(1) is 50 percent
of the total underpayment of tax, and the addition to tax under
section 6653(b)(2) is 50 percent of the interest payable under
section 6601, but only with respect to that part of the
underpayment that is due to fraud. Respondent has the burden of
proving by clear and convincing evidence that petitioner
fraudulently underpaid tax. Sec. 7454(a); Rule 142(b); Stoltzfus
v. United States, 398 F.2d 1002, 1004-1005 (3d Cir. 1968). To
meet the burden of proof, respondent must show that: (1) An
underpayment exists; and (2) the taxpayer intended to evade taxes
known to be owing by conduct intended to conceal, mislead, or
otherwise prevent the collection of taxes. Parks v.
Commissioner, 94 T.C. 654, 660-661 (1990).
2. Underpayment
As discussed above at paragraph II-B-1, petitioner is
collaterally estopped by his conviction under section 7206(1)
from denying that he failed to report a substantial amount of
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011