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attempted to challenge various matters that were deemed admitted
under Rule 90(c). In particular, petitioner testified that: (1)
The purchase price of the Babcock property was only $30,000 (as
opposed to the $55,000 determined by respondent); (2) the
improvements to the Babcock property cost only $103,000 (as
opposed to the $162,000 determined by respondent); (3) his
parents paid $15,000 of his child-support obligation in 1990; and
(4) his parents paid a substantial portion of the purchase price
of the Rinker boat.
Petitioner's testimony at trial lacked credibility and was
contradicted by respondent's witness, Special Agent Gary
Makovsky. On the basis of our review of the entire record
herein, we find petitioner's assertions to be contrived and
unpersuasive.
Respondent also determined that petitioner is liable for the
addition to tax for fraud for the taxable year 1988 and the fraud
penalty for the taxable years 1989, 1990, and 1991. Respondent
must prove fraud by clear and convincing evidence. See sec.
7454(a); Rule 142(b); Rowlee v. Commissioner, 80 T.C. 1111, 1123
(1983).
Fraud requires a showing that the taxpayer intended to evade
a tax known or believed to be owing. See Stoltzfus v. United
States, 398 F.2d 1002, 1004 (3d Cir. 1968). The existence of
fraud is a question of fact. See Gajewski v. Commissioner, 67
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