- 43 - 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 toPage: Previous 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 Next
Last modified: May 25, 2011