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is due to fraud. Fraud, under section 6663, is defined as an
intentional wrongdoing designed to evade tax believed to be
owing. Conforte v. Commissioner, 692 F.2d 587, 592 (9th Cir.
1982), affg. in part and revg. in part 74 T.C. 1160 (1980); Neely
v. Commissioner, 116 T.C. 79, 86 (2001) (citing Edelson v.
Commissioner, 829 F.2d 828, 833 (9th Cir. 1987), affg. T.C. Memo.
1986-223)). When the Commissioner has alleged fraud under
section 6663, the Commissioner has the initial burden of proving
by clear and convincing evidence for the years at issue that some
portion of the underpayment of tax is due to fraud. Sec.
7454(a); Rule 142(b); see also Anastasato v. Commissioner, 794
F.2d 884, 889 (3d Cir. 1986), vacating T.C. Memo. 1985-101. To
satisfy the burden of proof, the Commissioner must show that:
(1) An underpayment in tax exists, and (2) the taxpayer intended
to evade taxes by concealing, misleading, or otherwise preventing
the collection of taxes. Parks v. Commissioner, 94 T.C. 654,
660-661 (1990). The Commissioner can prove by circumstantial
evidence that the taxpayer intended to evade taxes by concealing,
misleading, or otherwise preventing the collection of taxes. Id.
at 664.
Fraud is a question of fact to be resolved upon
consideration of the entire record and is never presumed. Estate
of Pittard v. Commissioner, 69 T.C. 391, 404 (1977). The
Commissioner may draw reasonable inferences to establish
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