Franklin W. Briggs - Page 43




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              Respondent determined that petitioners are liable for                   
         additions to tax for fraud under section 6653(b)(1) for all years            
         in issue.  Respondent asserts that for all years in issue,                   
         petitioners’ omitted West Florida Gas rebate income gave rise to             
         underpayments attributable to fraud.  In addition, for taxable               
         year 1988, respondent asserts that petitioners’ omission from                
         gross income of ACT assets sales proceeds gave rise to additional            
         amounts of underpayment attributable to fraud.                               
         Discussion                                                                   
              For 1986 and 1987, if any part of any underpayment of a tax             
         required to be shown on a return is due to fraud, there is an                
         addition to tax equal to 75 percent of the portion of the                    
         underpayment attributable to fraud, along with 50 percent of the             
         interest due on the portion of the underpayment attributable to              
         fraud.  See sec. 6653(b)(1)(A) and (B).  For 1988, if any part of            
         any underpayment of a tax required to be shown on a return is due            
         to fraud, there is an addition to tax of 75 percent of the                   
         portion of the underpayment that is attributable to fraud.  See              
         sec. 6653(b)(1).                                                             
              Respondent must prove fraud by clear and convincing                     
         evidence.  See sec. 7454(a); Rule 142(b).  Fraud is the                      
         intentional wrongdoing of a taxpayer to evade tax believed to be             
         owing.  See Petzoldt v. Commissioner, 92 T.C. 661, 698 (1989).  A            
         finding of fraud requires a showing that the taxpayer intended to            






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