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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 appropriate
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