Charles Jerome Posnanski - Page 10

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               The total deficiency determined by respondent for all 5                
          years is $24,535.  Petitioner has paid $15,143.24 toward these              
          tax liabilities.  Respondent acknowledges that petitioner paid              
          this amount.  Therefore, petitioner is liable for the payment of            
          an additional $9,391.76 in income taxes, plus any penalties which           
          may apply.  See, e.g., Hickman v. Commissioner, supra.                      
               Section 6663(a) imposes a penalty for fraud equal to 75                
          percent of the portion of an underpayment that is attributable to           
          fraud.  If any portion of an underpayment is attributable to                
          fraud, then the entire underpayment is treated as due to fraud              
          unless the taxpayer can establish that some portion of the                  
          underpayment is not attributable to fraud.  See sec. 6663(b).3              
               Respondent bears the burden of proving fraud by clear and              
          convincing evidence.  See sec. 7454(a); Rule 142(b); Sadler v.              
          Commissioner, 113 T.C. 99, 102 (1999).  To satisfy this burden,             
          respondent must show that:  (1) An underpayment exists; and (2)             
          petitioner intended to evade taxes known to be owing by conduct             
          intended to conceal, mislead, or otherwise prevent the collection           
          of taxes.  See Parks v. Commissioner, 94 T.C. 654, 660-661                  
          (1990).  We have found, and petitioner admits, that he underpaid            
          his taxes for the years in issue in the amounts determined in the           
          notice of deficiency.                                                       

               3In the case of a joint return, the fraud penalty does not             
          apply to a spouse unless some portion of the underpayment is due            
          to the fraud of such spouse.  See sec. 6663(c).                             

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