- 22 -
7454(a); Rule 142(b); Toussaint v. Commissioner, 743 F.2d 309,
312 (5th Cir. 1984), affg. T.C. Memo. 1984-25; Wright v.
Commissioner, 84 T.C. 636, 639 (1985). Respondent must meet this
burden through affirmative evidence because fraud is never
imputed or presumed. See Toussaint v. Commissioner, supra at
312; Beaver v. Commissioner, 55 T.C. 85, 92 (1970). 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). Petitioners’ entire course of conduct can be indicative
of fraud. See Stone v. Commissioner, 56 T.C. 213, 224 (1971);
Otsuki v. Commissioner, 53 T.C. 96, 105-106 (1969).
To satisfy his burden of proof, respondent must show two
things. First, respondent must prove that an underpayment
exists. Respondent may not rely on petitioner’s failure to
disprove a deficiency determination to satisfy this element. See
Drieborg v. Commissioner, 225 F.2d 216, 218 (6th Cir. 1955),
affg. in part a Memorandum Opinion of this Court; Parks v.
Commissioner, 94 T.C. 654, 660-661 (1990); Petzoldt v.
Commissioner, 92 T.C. 661, 700 (1989). Second, respondent must
show that petitioners intended to evade taxes known to be owing
by conduct intended to conceal, mislead, or otherwise prevent the
collection of taxes. See Stoltzfus v. United States, 398 F.2d
1002, 1004 (3d Cir. 1968); DiLeo v. Commissioner, 96 T.C. 858,
Page: Previous 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 NextLast modified: May 25, 2011