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that some portion of the underpayment is due to fraud. See sec.
7454(a); Rule 142(b); Laurins v. Commissioner, 889 F.2d 910, 913
(9th Cir. 1989), affg. Norman v. Commissioner, T.C. Memo. 1987-
265; Edelson v. Commissioner, 829 F.2d 828, 832 (9th Cir. 1987),
affg. T.C. Memo. 1986-223; Petzholdt v. Commissioner, 92 T.C.
661, 698-699 (1989); Mitchell v. Commissioner, T.C. Memo. 1994-
242. If the Commissioner proves an underpayment and that some
portion of the underpayment is due to fraud, the bar of the 3-
year statute of limitations is lifted with respect to all items
on the return, and the Commissioner’s deficiency determinations
enjoy the usual presumption of correctness, placing the burden on
the taxpayer to prove an error. See Welch v. Helvering, 290 U.S.
111 (1933); Jackson v. Commissioner, 380 F.2d 661, 664 (6th Cir.
1967), affg. T.C. Memo. 1964-330; Colestock v. Commissioner, 102
T.C. 380, 385 (1994); Willits v. Commissioner, 36 B.T.A. 294, 300
(1937); Bencivenga v. Commissioner, T.C. Memo. 1989-239.
Further, the addition to tax under section 6653(b)(1) will
apply to the entire underpayment ultimately determined, even
though only part of the underpayment is due to fraud. See Stone
v. Commissioner, 56 T.C. 213, 220-221 (1971); Otsuki v.
Commissioner, 53 T.C. 96, 105 (1969); Kelley v. Commissioner,
T.C. Memo. 1991-324, affd. without published opinion 988 F.2d
1218 (11th Cir. 1993); Cleveland v. Commissioner, T.C. Memo.
1983-299. The addition to tax under section 6653(b)(2), however,
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