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fraud. Solomon v. Commissioner, 732 F.2d 1459, 1461 (6th Cir.
1984), affg. per curiam T.C. Memo. 1982-603.
C. Fraud Penalties--Mrs. Ortiz
Fraud is not imputed from one spouse to the other. Stone v.
Commissioner, 56 T.C. at 227-228. Section 6663(c) provides that,
in the case of a joint income tax return, the imposition of the
fraud penalty under section 6663(a) does not apply with respect
to a spouse unless some part of the underpayment is due to the
fraud of such spouse. Respondent has the burden of proving by
clear and convincing evidence that Mrs. Ortiz committed fraud.
There is no evidence in this record that Mrs. Ortiz displayed a
fraudulent intent to evade taxes during the years in issue.
There is nothing to show that she was involved in her husband's
wholesale used car business or had any direct knowledge of its
operations. She worked as a pharmacist in 1991 and 1992. She
received wages and reported them as income for tax purposes.
While it is likely that she was not completely unaware of her
husband's activity, that fact alone cannot sustain a finding of
fraud as to her. It is true that there was some unreported
interest income in 1991 and 1992, but those omissions do not
justify a finding of fraud. Thus, we conclude that Mrs. Ortiz is
not liable for the fraud penalties, although she is jointly and
severally liable for any deficiencies resulting from the findings
and conclusions reached herein. Mrs. Ortiz has not raised the
issue, or offered any evidence, to show that she should be
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