- 11 -
raised in the assignment of errors is deemed conceded by the
petitioner.” Id. We added: “If petitioner assigns error to
respondent’s determination of the fraud addition to tax, then the
respondent must affirmatively plead the fraud, together with the
facts in support thereof, in his answer. Rule 36(b).” Id. We
held, however, that if the Commissioner pleads fraud in the
answer, and the taxpayer, in the reply, denies the allegations of
fraud, the Commissioner will not be put to his proof if the
taxpayer thereafter states that he will not contest the fraud
addition and defaults. Id. Implicit in our discussion of Rule
34(b) is the conclusion that, if the Commissioner determines
fraud and the taxpayer fails to assign error to that
determination, the fraud penalty is conceded, and the
Commissioner need not plead fraud together with supporting facts.
See Brailsford v. Commissioner, T.C. Memo. 1991-639 (with respect
to whether statute of limitations remained open against joint-
return-filer on account of other joint-return-filer’s fraud:
“Respondent had no duty to discuss or prove an issue that
petitioner had not raised, either directly (an assignment of
error as to the fraud determination) or indirectly (pleading the
statute of limitations).”).
Section 7491(c) imposes a burden on the Commissioner “in any
court proceeding with respect to the liability of any individual
for any penalty”. Rule 34(b)(4) and the statute are consistent.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011