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existence of fraud is a question of fact to be resolved upon
consideration of the entire record. See Gajewski v.
Commissioner, 67 T.C. 181, 199 (1976), affd. without published
opinion 578 F.2d 1383 (8th Cir. 1978); Estate of Pittard v.
Commissioner, 69 T.C. 391 (1977). Fraud is not to be imputed or
presumed, but rather must be established by independent evidence
of fraudulent intent. See Beaver v. Commissioner, 55 T.C. 85, 92
(1970); Otsuki v. Commissioner, 53 T.C. 96 (1969). Fraud may not
be found under “circumstances which at the most create only
suspicion.” Davis v. Commissioner, 184 F.2d 86, 87 (10th Cir.
1950); Petzoldt v. Commissioner, 92 T.C. 661, 700 (1989).
A finding of fraud requires proof of specific intent to
evade a tax believed to be owing. If an understatement of tax
is caused by a good faith misunderstanding of the tax laws, the
understatement would not be due to fraud. See Niedringhaus v.
Commissioner, 99 T.C. 202, 217 (1992). A good faith
misunderstanding for this purpose can exist even if the
misunderstanding is objectively unreasonable. See id. at 216-
217. We have cautioned, however, that a good faith
misunderstanding of the law is different than disagreement with
the law or a belief that the law is or may be unconstitutional.
See id. at 217-218.
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