- 42 -
No evidence supports these claimed deductions, and they are
disallowed.
Additional Deductions Claimed on Brief -- 1987 & 1988
On posttrial brief only, petitioner claims additional business
and itemized expenses for 1987 and 1988 of $110,835 and $185,219,
respectively (see supra p. 22). These claimed additional expenses
relate to completely unsubstantiated alleged depreciation, bad debts,
payments to TABC, a net operating loss, medical expenses, and
charitable contributions. These claimed deductions were not properly
raised by petitioner in his petition or by motion. Rule 41. No
credible evidence supports these claimed deductions, and they are
disallowed.
We also note that for fraud purposes, a taxpayer is generally
required to present probative evidence of deductions not previously
claimed on his income tax return before respondent bears any burden
of proof with regard to alleged additional deductions. See United
States v. Bender, 218 F.2d 869 (7th Cir. 1955); Rivera v.
Commissioner, T.C. Memo. 1979-343.
Fraud for 1987 and 1988
To establish fraud, respondent has the burden of proving by
clear and convincing evidence that a taxpayer underpaid his Federal
income taxes and that the taxpayer's underpayment was due to
fraudulent intent. Sec. 7454(a); Rule 142(b); Clayton v.
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