Shirley J. Raney - Page 6




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          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.                                                         








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