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withholding on his Forms W-2 were false, that he knew that these
amounts were not withheld, and that he intentionally reported
false withholding information on his 1989 original return, 1989
amended return, and 1990 return in order to generate refunds for
1989 and 1990 (so as to have extra funds to sustain himself and
his financially strapped businesses).
Petitioner asserts that his testimony was direct, candid,
truthful, credible, and honest. We disagree. His testimony was
evasive and not credible. Additionally, petitioner pleaded
guilty to filing a false claim for a refund of Federal income
taxes.
We conclude that respondent has proven by clear and
convincing evidence that petitioner fraudulently underpaid his
taxes for 1989 and 1990.
Once the Commissioner establishes that any portion of the
underpayment is attributable to fraud, the entire underpayment is
treated as attributable to fraud and subjected to a 75-percent
penalty, except with respect to any portion of the underpayment
that the taxpayer establishes is not attributable to fraud. See
sec. 6663(a) and (b). Petitioner has not proven that any part of
either underpayment is not attributable to fraud. Therefore, the
entire underpayments for 1989 and 1990 are subject to the 75-
percent penalty.
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