- 7 -
Commissioner, 77 T.C. 334, 336 (1981); Gilday v. Commissioner, 62
T.C. 260, 261 (1974). Accordingly, we sustain respondent's
determinations as to the deficiencies.
Determination of Fraud
Respondent also moved for judgment on the fraud issue based
on the affirmative allegations of fact contained in respondent's
answer, which were deemed admitted by the order of this Court
pursuant to Rule 37(c). Respondent has the burden of proving
that some portion of each underpayment is due to fraud by clear
and convincing evidence. See sec. 7454(a); Rule 142(b); Parks v.
Commissioner, 94 T.C. 654, 660 (1990).
The facts deemed admitted establish that during the years at
issue, petitioner regularly deducted expenses that it had not
paid or incurred, including expenses of equipment that petitioner
did not own or that did not exist; that petitioner deducted as
business expenses amounts that were paid to its president for
expenses of his family; that petitioner omitted income; and that
petitioner, through its president, intentionally made false and
misleading statements to respondent's agents during the
examination of petitioner's income tax returns. Finally,
petitioner has failed to comply with the Court's pretrial orders
or the Court's other orders and failed to appear for the
scheduled trial--additional indications of deliberate efforts by
petitioner to conceal the facts concerning its tax liability.
Page: Previous 1 2 3 4 5 6 7 8 Next
Last modified: May 25, 2011