Mahendra K. Tandon - Page 32

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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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