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income tax, statutory additions, and interest relating to Metro’s
tax years 1988 through 1990.
When they filed their petitions, Butler resided in Cape
Coral, Florida, and McGraw resided in Mahtomedi, Minnesota.
OPINION
Respondent contends that Metro underpaid its tax liability
for tax years 1988 through 1990; the underpayments were due to
petitioners’ fraudulent actions as officers of Metro; and
petitioners, as transferees of Metro’s assets, are liable for
Metro’s tax liabilities pursuant to section 6901. Petitioners
contend that there was no underpayment of tax attributable to the
conduct of Metro officers, and that the period of limitations
relating to Metro’s tax years 1988 through 1990 expired.
I. Statute of Limitations, Deficiency Determination, and Fraud
Penalty
“In the case of a false or fraudulent return with the intent
to evade tax, the tax may be assessed, or a proceeding in court
for collection of such tax may be begun without assessment, at
any time.” Sec. 6501(c)(1); see also sec. 6901(c)(1).
Respondent must establish by clear and convincing evidence that
for each year in issue an underpayment of tax exists and some
portion of the underpayment is due to fraud. See Rule 142(b);
Ballard v. Commissioner, 740 F.2d 659 (8th Cir. 1984), affg. in
part and revg. in part T.C. Memo. 1982-466; Petzoldt v.
Commissioner, 92 T.C. 661, 699 (1989).
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