- 9 - that petitioner is entitled to deduct $1,356.94 as rental expenses in 1983. Finally, respondent concedes that petitioner is entitled to deduct one-half of the self-employment tax imposed for 1982 and 1983 as recalculated. With respect to the items of income and deductions, respondent computed petitioner’s tax liability on one-half of the net income determined, pursuant to California community property law. Petitioner’s Contentions Petitioner contends that respondent has the burden of proof, by clear and convincing evidence, in this case. He equates respondent’s determination that he failed to file tax returns as fraud under section 7454(a) and Rule 142(b). Respondent, however, has not determined the applicability of a civil fraud penalty in this case. The addition to tax for failure to file, section 6651(a), and not the addition to tax for fraud, (former) section 6653(b), is an issue. Failure to file tax returns is not the equivalent of fraud for purposes of civil tax penalties. See, e.g., Kotmair v. Commissioner, 86 T.C. 1253, 1261-1262 (1986); Koeneman v. Commissioner, T.C. Memo. 1958-186; cf. current secs. 6651(f), 6663. The clear and convincing standard is not applicable in this case. The preponderance of the evidence supports respondent’s position on each of the issues. Petitioner argues that he did file tax returns and that the statute of limitations bars the deficiency notice in this case.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011