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during late December 1983 or early 1984, Hund notified Hitchens
of a search planned for his residence. Hund instructed Hitchens
to leave $5,000, supposedly for Wilson, on his dresser and to be
present at the house. Wilson did not know Hitchens had been
warned. Wilson, Ryan, Cattalo, Hund, and Grove searched the
residence. During the search, Hund appropriated the money from
the dresser.
Respondent asserts that Grove received $5,000 from Hitchens
in December 1983. Grove was convicted of bribery and conspiracy
for this payment. We find that Grove received the $5,000.
II. Fraud
For the years in issue, section 6653(b) imposes an addition
to tax of 50 percent of the underpayment of tax if any part of
the underpayment is due to fraud, plus an amount equal to 50
percent of the interest on the portion of the underpayment
attributable to fraud. Respondent has the burden of proving
fraud by clear and convincing evidence. Sec. 7454(a); Rule
142(b); Estate of Mazzoni v. Commissioner, 451 F.2d 197, 201 (3d
Cir. 1971), affg. T.C. Memo. 1970-37; Cochrane v. Commissioner,
107 T.C. 18 (1996). Absent a finding of fraud, section 6501
precludes the assessment and collection of the alleged
deficiencies in and additions to tax for the years in issue.
For the addition to tax under section 6653(b)(1) to apply,
the Commissioner must establish (1) an underpayment of taxes for
each year and (2) that some part of the underpayment is due to
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