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nontaxable source, respondent may satisfy his burden by
disproving the nontaxable source so alleged. See United States
v. Massei, 355 U.S. 595 (1958); Parks v. Commissioner, supra.
We find that respondent has proven by clear and convincing
evidence a likely source of the underreported deposits; i.e.,
that they are income from TBJ’s sales. We also find that
respondent has disproven, by clear and convincing evidence, the
nontaxable source alleged by petitioners. Petitioners’
explanation of loans and inheritances from their relatives is
implausible and incredible. The first prong is satisfied.
b. Fraudulent Intent
Respondent must prove that some portion of the underpayment
was due to fraud. See Professional Servs. v. Commissioner, 79
T.C. 888, 930 (1982).
Fraud is an intentional wrongdoing designed to evade a tax
believed to be owing. See United States v. Walton, 909 F.2d 915,
926 (6th Cir. 1990); Miller v. Commissioner, 94 T.C. 316, 332
(1990). The existence of fraud is a question of fact. See
King’s Court Mobile Home Park v. Commissioner, 98 T.C. 511, 516
(1992). Fraud is never presumed or imputed; it must be
established by some independent evidence of fraudulent intent.
See Otsuki v. Commissioner, 53 T.C. 96, 106 (1969); Beddow v.
Commissioner, supra. Because direct proof of the taxpayer’s
intent is rarely available, fraud may be proven by circumstantial
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