- 6 -
manner most favorable to the party opposing summary judgment."
Marshall v. Commissioner, 85 T.C. 267, 271 (1985).
Respondent determined that petitioners are liable for the
additions to tax for fraud, which requires respondent to
establish, by clear and convincing evidence, that there is an
underpayment of tax and that some portion of that underpayment is
due to fraud. See sec. 7454(a); Rule 142(b); DiLeo v.
Commissioner, 96 T.C. 858, 873 (1991), affd. 959 F.2d 16 (2d Cir.
1992).
"Facts deemed admitted pursuant to Rule 37(c) are considered
conclusively established and may be relied upon by the government
even in relation to issues where the government bears the burden
of proof." Baptiste v. Commissioner, 29 F.3d 1533, 1537 (11th
Cir. 1994), affg. T.C. Memo. 1992-198; see also Doncaster v.
Commissioner, 77 T.C. 334, 336-338 (1981) (holding that deemed
admissions under Rule 37(c) are sufficient to satisfy the
government's burden of proof with respect to the issue of fraud).
"Fraud is defined as an intentional wrongdoing designed to
evade tax believed to be owing." Petzoldt v. Commissioner, 92
T.C. 661, 698 (1989). Fraud will never be presumed. See Beaver
v. Commissioner, 55 T.C. 85, 92 (1970). It may, however, be
proved by circumstantial evidence. See Otsuki v. Commissioner,
53 T.C. 96, 106 (1969). Courts have relied on a number of
indicia or badges of fraud in deciding whether to sustain the
Page: Previous 1 2 3 4 5 6 7 8 Next
Last modified: May 25, 2011