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added to the tax an amount equal to 75 percent of the portion of
the underpayment which is attributable to fraud." Once the
Secretary establishes that a part of an underpayment is due to
fraud, "the entire underpayment shall be treated as attributable
to fraud, except with respect to any portion of the underpayment
which the taxpayer establishes (by a preponderance of the
evidence) is not attributable to fraud." Sec. 6663(b).
The burden that respondent bears in proving fraud under
section 6501(c)(1) is the same burden that he bears in
establishing fraud for purposes of the section 6663(a) penalty.
Ruidoso Racing Association, Inc. v. Commissioner, 476 F.2d 502,
507 (10th Cir. 1973), affg. in part and remanding in part T.C.
Memo. 1971-194; DeBrouse v. Commissioner, T.C. Memo. 1988-119,
affd. 878 F.2d 379 (4th Cir. 1989). Since respondent has met his
burden for purposes of section 6501(c)(1), we hold that
respondent has established that a portion of petitioners'
underpayment is due to fraud for purposes of section 6663(a). We
further hold that petitioners have not presented credible
evidence that any portion of their underpayment was not due to
fraud. Accordingly, we sustain respondent's determination for
additions to tax and penalties imposed by sections 6653(b) and
6663(a).
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