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portion of the underpayment due to fraud shall be added to the
tax. Section 6653(b)(1)(B) also provides for an additional
addition to tax of 50 percent of the interest payable under
section 6601 for that part of the underpayment that is due to
fraud. If respondent proves that any part of the underpayment is
due to fraud, the entire underpayment shall be treated as due to
fraud unless petitioner can show by a preponderance of the
evidence that part of it is not due to fraud. Sec. 6653(b)(2).
Fraud is defined as an intentional wrongdoing designed to
evade tax believed to be owing. Edelson v. Commissioner, 829
F.2d 828, 833 (9th Cir. 1987), affg. T.C. Memo. 1986-223.
Respondent has the burden of proving fraud by clear and
convincing evidence. Sec. 7454(a); Rule 142(b). To satisfy this
burden, respondent must prove that petitioner 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, 661 (1990).
The existence of fraud is a question of fact to be resolved
upon consideration of the entire record. DiLeo v. Commissioner,
96 T.C. 858, 874 (1991), affd. 959 F.2d 16 (2d Cir. 1992). Fraud
is not presumed and must be established by independent evidence
of fraudulent intent. Edelson v. Commissioner, supra. Fraud may
be shown by circumstantial evidence because direct evidence of
the taxpayer's fraudulent intent is seldom available. Gajewski
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