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B. Statute of Limitations and Fraud Issues
1. In General
A deficiency in tax generally must be assessed within
3 years of the date on which the return was filed. See sec.
6501(a). Section 6501(c)(1) provides one of the exceptions to
the general 3-year limitation period. Under that exception, the
tax may be assessed at any time in the case of a false or
fraudulent return filed with the intent to evade tax. Respondent
has the burden of proving the applicability of an exception to
the general 3-year limitation period. See Rule 142; Harlan v.
Commissioner, 116 T.C. 31, 39 (2001). Respondent must prove the
same elements of fraud under section 6501(c)(1) as are required
for imposing a fraud penalty under section 6653(b). See, e.g.,
Mobley v. Commissioner, T.C. Memo. 1993-60, affd. without
published opinion 33 F.3d 1382 (11th Cir. 1994). To prevail
under section 6653(b), respondent must show through clear and
convincing evidence both that (1) an underpayment of tax exists,
and (2) some part of the underpayment is due to fraud. See sec.
7454(a); Rule 142(b); DiLeo v. Commissioner, 96 T.C. 858, 873
(1991), affd. 959 F.2d 16 (2d Cir. 1992).
Section 6501(e) provides another exception to the 3-year
general limitation period for assessing a tax. Under that
exception, the 3-year limitation period is extended to 6 years
where a taxpayer omits properly includable income from his or her
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