Manuel and Margaret Karcho - Page 25

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          underpayment which the taxpayer establishes is not attributable             
          to fraud.10  See secs. 6653(b)(2), 6663(b).                                 
               Where joint returns are filed, the fraud of one spouse is              
          not automatically attributed to the other; the other spouse is              
          not liable for fraud unless the Commissioner shows that some part           
          of the underpayment is due to the fraud of such other spouse.               
          See secs. 6653(b)(3), 6663(c).                                              
               The Commissioner meets his burden of proof if it is shown              
          that the taxpayer intended to evade taxes known to be owing by              
          conduct intended to conceal, mislead, or otherwise prevent the              
          collection of such taxes.  See Hagaman v. Commissioner, 958 F.2d            
          684, 696 (6th Cir. 1992) (citing United States v. Walton, 909               
          F.2d 915, 926 (6th Cir. 1990)), affg. and remanding T.C. Memo.              
          1987-549; Rowlee v. Commissioner, 80 T.C. 1111, 1123 (1983).  A             
          conviction for the willful attempt to evade or defeat income                
          taxes under section 7201 precludes a taxpayer in a subsequent               
          civil proceeding from denying that an underpayment in his income            
          tax for the taxable year of conviction was due to fraud.  See               
          Gray v. Commissioner, 708 F.2d 243 (6th Cir. 1983), affg. T.C.              
          Memo. 1981-1; Plunkett v. Commissioner, 465 F.2d 299 (7th Cir.              

               10  Sec. 6663(b), applicable to petitioners’ 1989, 1990, and           
          1991 taxable years, clarifies that petitioners need only                    
          establish by a preponderance of the evidence that some portion of           
          the underpayment is not attributable to fraud.                              

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