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II. Additions to Tax for Fraud
The next issue is whether any part of the underpayment of
income tax for each year in issue is due to fraud. Respondent’s
notice of deficiency determined that petitioner is liable for the
addition to tax for fraud imposed under section 6653(b)(1)33 for
the taxable year 1988 and for the addition to tax for fraudulent
failure to file under section 6651(f)34 for the taxable years
33Sec. 6653(b)(1) provides, in part:
SEC. 6653(b) Fraud.--
(1) In General.--If any part of any underpayment
* * * of tax required to be shown on a return is due to
fraud, there shall be added to the tax an amount equal
to 75 percent of the portion of the underpayment which
is attributable to fraud.
34Sec. 6651(f) provides:
SEC. 6651(f) Increase in Penalty for Fraudulent
Failure to File.--If any failure to file any return is
fraudulent, paragraph (1) of subsection (a) shall be
applied–-
(1) by substituting “15 percent” for “5
percent” each place it appears, and
(2) by substituting “75 percent” for “25
percent”.
Sec. 6651(a)(1) provides in relevant part:
SEC. 6651. FAILURE TO FILE TAX RETURN OR TO PAY TAX.
(a) Addition to the Tax.--In case of failure--
(1) to file any return required under
authority of subchapter A of chapter 61 * * * on
the date prescribed therefor (determined with
(continued...)
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