Mahendra K. Tandon - Page 25

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          underpayment attributable to fraud.  For 1986, 1987, and 1988, if           
          respondent establishes that any portion of the underpayment is              
          attributable to fraud, the entire underpayment is treated as                
          attributable to fraud and subjected to an addition to tax except            
          with respect to any portion of the underpayment that the taxpayer           
          establishes is not attributable to fraud.  Sec. 6653(b)(2).                 
               A.   Underpayment of Tax                                               
               The filing of an amended return reporting additional income            
          is an admission of an underpayment of tax.  See Badaracco v.                
          Commissioner, 464 U.S. 386, 399 (1984).  Petitioner's 1987                  
          amended return is an admission that he underreported, in his                
          original returns, $56,000 of income in 1987.  Additionally, on              
          brief, petitioner concedes that he underreported his income from            
          his Schedules C medical practice by $17,170.91 in 1985 and                  
          $44,401.56 in 1986.  Furthermore, respondent has established by             
          clear and convincing evidence an underpayment of tax by                     
          petitioner for each of the years in issue.                                  
               B.   Fraudulent Intent                                                 
               The Commissioner must prove that a portion of such                     
          underpayment for each taxable year was due to fraud.                        
          Professional Servs. v. Commissioner, 79 T.C. 888, 930 (1982).               
          The existence of fraud is a question of fact to be resolved from            
          the entire record.  Gajewski v. Commissioner, 67 T.C. 181, 199              
          (1976), affd. without published opinion 578 F.2d 1383 (8th Cir.             
          1978).  Because direct proof of a taxpayer's intent is rarely               
          available, fraud may be proven by circumstantial evidence, and              

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