- 4 -
unreported wages is greater (i.e., by the amount of the alleged
tax withholdings) than the amount determined by respondent, and
that petitioners are entitled to a withholding tax credit
relating to Mr. Drozdowski's wages from CPC.
The record does not support petitioners' contention. CPC did
not withhold taxes from Mr. Drozdowski's wages, and he did not
receive Forms W-2, which would have indicated the amounts of
income tax withholdings. Thus, petitioners are not entitled to a
withholding tax credit relating to Mr. Drozdowski's wages from
CPC. See sec. 31(a)(1); Edwards v. Commissioner, 39 T.C. 78, 84
(1962) (holding that an employee is not entitled to a credit for
taxes that were never withheld). Petitioners bear the burden of
proof, see Welch v. Helvering, 290 U.S. 111, 115 (1933), yet have
failed to establish that they are entitled to a withholding tax
credit.
Respondent determined that Mr. Drozdowski, pursuant to
sections 6653(b)(1)(A) and (B), 6653(b), and 6663, is liable for
additions to tax, and penalties, for fraud. Respondent must
establish by clear and convincing evidence that, for each year in
issue, an underpayment of tax exists and that some portion of the
underpayment is due to fraud. See Petzoldt v. Commissioner, 92
T.C. 661, 699 (1989). A taxpayer's attempts to conceal income,
mislead the Internal Revenue Service, or prevent the collection
Page: Previous 1 2 3 4 5 6 Next
Last modified: May 25, 2011