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Amos v. Commissioner, 43 T.C. 50, 56 (1964), affd. 360 F.2d 358
(4th Cir. 1965).
For taxable years 1987, 1988, and 1989, to satisfy his
burden of proof as to fraud, respondent must establish both that
(1) an underpayment exists for each year, and (2) that some part
of the underpayment is due to fraud. See DiLeo v. Commissioner,
96 T.C. 858, 873 (1991), affd. 959 F.2d 16 (2d Cir. 1992).
To prove an underpayment, the Commissioner need not prove
the precise amount of the deficiency he has determined, but only
that some portion of the underpayment of tax for each year is
due to fraud. See Niedringhaus v. Commissioner, 99 T.C. 202,
210 (1992). The Commissioner cannot rely simply on the
taxpayer’s failure to prove error in his determination of the
deficiency. See Parks v. Commissioner, supra at 660-661;
Petzoldt v. Commissioner, 92 T.C. 661, 700 (1989).
Respondent has documented petitioners’ bank deposits and
cash expenditures and has established a likely source of
unreported income; i.e., gambling and illegal numbers
operations. See Holland v. United States, 348 U.S. at 138. On
the basis of all the evidence, we conclude that respondent has
shown by clear and convincing evidence that petitioners
underpaid their income taxes for each of the taxable years in
issue. See DiLeo v. Commissioner, supra at 873-874.
Fraud is intentional wrongdoing designed to evade tax
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