- 5 - of income tax may establish the requisite fraudulent intent. See Rowlee v. Commissioner, 80 T.C. 1111, 1123 (1983). Respondent has established that, for each year in issue, petitioners' underpayment of tax was attributable to Mr. Drozdowski's fraud. Each of petitioners' amended returns is an admission of a tax underpayment. See Badaracco v. Commissioner, 464 U.S. 386, 399 (1984). In addition, Mr. Drozdowski's actions warrant an inference of fraud. Mr. Drozdowski knew that his wages from CPC were subject to income tax, yet he requested that CPC not withhold taxes from, and intentionally failed to report, such wages. As a result, he underreported substantial amounts of income relating to each year in issue. See Holland v. United States, 348 U.S. 121, 139 (1954) (holding that a pattern of consistently and substantially underreporting income may justify an inference of fraud); Otsuki v. Commissioner, 53 T.C. 96, 109 (1969) (holding that underreporting income, coupled with other circumstances showing an intent to conceal, justifies an inference of fraud). Accordingly, we hold that Mr. Drozdowski is liable for the additions to tax, and penalties, for fraud. Contentions we have not addressed are irrelevant, moot, or meritless.Page: Previous 1 2 3 4 5 6 Next
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