Richard P. Console - Page 8




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          resulting from the taxpayer's fraud.”  Helvering v. Mitchell, 303           
          U.S. 391, 401 (1938).                                                       
               Fraud denotes intentional wrongdoing on the part of the                
          taxpayer with the specific purpose of evading a tax known or                
          believed to be owing.  Petzoldt v. Commissioner, 92 T.C. 661, 698           
          (1989).  Fraud is shown by proof that the taxpayer intended to              
          conceal, mislead, or otherwise prevent the collection of his or             
          her taxes and that there is an underpayment of tax.  Spies v.               
          United States, 317 U.S. 492, 499 (1943); Stoltzfus v. United                
          States, 398 F.2d 1002, 1005 (3d Cir. 1968); Webb v. Commissioner,           
          394 F.2d 366, 377 (5th Cir. 1968), affg. T.C. Memo. 1966-81;                
          Rowlee v. Commissioner, supra at 1123.  Thus, in order to sustain           
          his burden as to fraud, respondent must prove that:  (1)                    
          Petitioner underpaid his taxes for the relevant years, and (2)              
          some part of each underpayment was due to fraud.2                           
               It is well settled in this Court that the Commissioner may             
          establish fraud by relying upon matters deemed admitted under               
          Rule 90.  Marshall v. Commissioner, 85 T.C. 267 (1985); Morrison            
          v. Commissioner, 81 T.C. 644, 651 (1983); Doncaster v.                      
          Commissioner, 77 T.C. 334, 336 (1981).  The Commissioner may also           
          establish fraud by relying on facts deemed to be stipulated under           


               2If respondent establishes that some part of the                       
          underpayment for a year is due to fraud, all of the underpayment            
          is deemed attributable to fraud unless petitioner proves                    
          otherwise.  See sec. 6653(b)(2), as in effect for 1986 through              
          1988; sec. 6663(b), as in effect for 1989.                                  





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