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Respondent has proven by clear and convincing evidence that
for 6 consecutive years petitioner received advertising revenue
in amounts ranging from $44,125 to $77,175 per year, and
averaging more than $56,000 per year. For 4 of these years
petitioner omitted all of these receipts, for the other 2 years
petitioner omitted about half of these receipts. For these 6
years petitioner omitted taxable income in amounts ranging from
$26,670 to $57,505 per year, and averaging more than $35,000 per
year. This pattern of consistent underreporting of income is
strong evidence of fraudulent omissions of income, which resulted
in underpayments of tax for each of the 6 years in issue.
When the foregoing is combined with petitioner’s failure to
produce to respondent any records or other information with
respect to sales of advertising, in connection with respondent’s
examination of petitioner’s income tax liabilities for the 6
years in issue, we conclude that respondent has proven by clear
and convincing evidence that a part or all of the underpayment
for each of the years in issue is due to petitioner’s fraud.
Petitioner has not alleged in the pleadings that any part of
the deficiency for any of the years in issue is not due to fraud.
We hold that respondent’s motion for judgment on the
pleadings should be granted as to both the determined
deficiencies and the additions to tax under sections 6651(f),
6654, and 6663. To reflect this,
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Last modified: May 25, 2011