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by clear and convincing evidence that, for the 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 IRS, or prevent the collection of income tax may
establish the requisite fraudulent intent. See Rowlee v.
Commissioner, 80 T.C. 1111, 1123 (1983).
Respondent has established that, for the year in issue, the
underpayment of tax was attributable to Mr. Jackson's fraud. Mr.
Jackson received but failed to report on petitioners' 1996 tax
return, $3,799 of taxable income, resulting in an underpayment of
tax. Mr. Jackson attempted to prevent the IRS from collecting
his income tax liability on this unreported income by providing
incorrect social security numbers to his employers. See Hand v.
Commissioner, T.C. Memo. 1982-457 (holding that the use of false
social security numbers is evidence of fraudulent intent). In
addition, Mr. Jackson persisted in his attempt to conceal income
by submitting to respondent and the Court a counterfeit letter.
Accordingly, Mr. Jackson is liable for the fraud penalty.
Respondent, however, has not established that Mrs. Jackson acted
with fraudulent intent. Accordingly, Mrs. Jackson is not liable
for the fraud penalty. See sec. 6663(c).
To reflect the foregoing,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011