- 17 - each of these underpayments was due to the fraud of both Rogelio and Zenaida. We hold that petitioners failed to prove, by a preponderance of the evidence, that (1) any part of the underpayments for 1991 and 1992 was not due to fraud, (2) any of the deficiency determinations for 1991, 1992, or 1993 in the notice of deficiency was excessive, and (3) any part of the 1993 underpayment was not due to petitioners’ negligence. We consider first 1991 and 1992, the years as to which respondent determined fraud. We then consider 1993. II. 1991-1992 Respondent contends (1) that petitioners underpaid their taxes for 1991 and 1992, and (2) that all of petitioners’ 1991 and 1992 underpayments are due to fraud and thus, petitioners are liable for the fraud additions to tax under section 6663. Petitioners contend (1) that they did not underpay their taxes for 1991 and 1992, and (2) that respondent has not met respondent’s burden of proof on the fraud issue. Petitioners maintain (A) that respondent’s use of the bank deposits method of income reconstruction was not appropriate, and (B) that even if use of the bank deposits method was appropriate, petitioners’ excess deposits are attributable to nontaxable sources. Alternatively, petitioners contend that if they have underpaid their taxes, then any additions to tax are not appropriatePage: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Next
Last modified: May 25, 2011