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Petitioner's only argument is that he did not understate his
taxes in 1985, 1986, 1987, and 1988 and, thus, should not be
charged with the substantial understatement addition to tax.
Contrary to petitioner's assertions, we found that he did
understate his taxes for all of the years in issue. Based on our
findings in this case, we conclude that there was a substantial
understatement in each of the years in issue, and respondent's
determination is sustained to the extent of any underpayment
decided for those years.
Period of Limitations
Petitioner argues that the deficiencies and additions to tax
are barred by the expiration of the statutory period of
limitations because respondent has not proven that petitioner's
actions were fraudulent.
In the case of a false or fraudulent return with the intent
to evade tax, the tax may be assessed at any time. Sec.
6501(c)(1). If the return is fraudulent in any respect, it
deprives the taxpayer of the bar of the statutory period of
limitations for that year. Lowy v. Commissioner, 288 F.2d 517,
520 (2d Cir. 1961), affg. T.C. Memo. 1960-32; see also Colestock
v. Commissioner, 102 T.C. 380, 385 (1994) ("Thus, where fraud is
alleged and proven, respondent is free to determine a deficiency
with respect to all items for the particular taxable year without
regard to the period of limitations.").
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