- 6 - failure to file returns for each of the years in issue. The 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 from disagreement with the law or a belief that the law is or may be unconstitutional. See id. at 217-218.Page: Previous 1 2 3 4 5 6 7 8 Next
Last modified: May 25, 2011