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1989
Tax imposed under subtitle A $41,852.64
Tax shown on the return1 ($32,743.85)
Tax previously assessed 0.00
Amount of rebates made 0.00
Balance - (32,743.85)
Underpayment 74,596.49
1 This equals the reported tax liability--$41,852.64--
minus the overstated withholding--$74,596.49.
1990
Tax imposed under subtitle A $5,725.00
Tax shown on the return1 ($20,275.00)
Tax previously assessed 0.00
Amount of rebates made 0.00
Balance - (20,275.00)
Underpayment 26,000.00
1 This equals the reported tax liability--$5,725--minus
the overstated withholding--$26,000.
See sec. 6664; sec. 1.6664-2(g), Example (3), Income Tax Regs.
B. Fraudulent Intent
The Commissioner must prove that a portion of the
underpayment for each taxable year in issue was due to fraud.
See Professional Servs. v. Commissioner, 79 T.C. 888, 930 (1982).
The existence of fraud is a question of fact to be resolved from
the entire record. See Gajewski v. Commissioner, 67 T.C. 181,
199 (1976), affd. without published opinion 578 F.2d 1383 (8th
Cir. 1978). Because direct proof of a taxpayer's intent is
rarely available, fraud may be proven by circumstantial evidence,
and reasonable inferences may be drawn from the relevant facts.
See Spies v. United States, 317 U.S. 492, 499 (1943); Stephenson
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