- 15 -
or made any such conversions or transfers. Such testimony is
indicative of fraud on the part of petitioners.
Based on our review of the record, we conclude that
respondent has met his burden of proving fraud for each of the
relevant years. Petitioners’ clear pattern of underreporting
taxable income for 3 years, coupled with the lack of
recordkeeping and attempts to conceal a substantial amount of
cash transactions, leads to a particularly strong inference of
fraud. See Lee v. Commissioner, T.C. Memo. 1995-597.
Respondent has proven by clear and convincing evidence an
underpayment of tax for 1993, 1994, and 1995 and that some
portion of the underpayment was attributable to fraud.
Petitioners, on the other hand, have failed to show that any
portion of their underpayment was not due to fraud. Accordingly,
we sustain respondent’s determination that petitioners are liable
for the penalty for fraud under section 6663(a) for all the years
under consideration.
To reflect the foregoing and concessions,
Decision will be entered
under Rule 155.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Last modified: May 25, 2011