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6. Fraud Penalty
Respondent determined that the estate is liable for the
fraud penalty under section 6663(a). Respondent determined that
the fraud penalty applies to the underpayment of tax attributable
to the omission of assets, the undervaluation of assets, and the
deduction for Ms. Trompeter's claim.
Section 6663(a) imposes a 75-percent penalty on an
underpayment that is attributable to fraud. See also sec.
6664(a) (definition of "underpayment"). When respondent proves
that some part of an underpayment is attributable to fraud, the
entire underpayment is attributable to fraud unless the taxpayer
proves otherwise. Sec. 6663(b). Section 6663(a) does not reach
any portion of an underpayment for which there is reasonable
cause or for which the taxpayer acted in good faith. Sec.
6664(c).
Respondent must prove fraud by clear and convincing
evidence. Sec. 7454; Rule 142(b); see also Castillo v.
Commissioner, 84 T.C. 405, 408 (1985). Respondent must prove
that the estate underpaid its taxes, Lee v. United States,
466 F.2d 11, 16-17 (5th Cir. 1972); Plunkett v. Commissioner,
465 F.2d 299, 303 (7th Cir. 1972), affg. T.C. Memo. 1970-274;
Parks v. Commissioner, 94 T.C. 654, 660-664 (1990), and that the
estate did so with the requisite fraudulent intent. Fraud
requires an intentional wrongdoing on the part of the taxpayer
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