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protection of the revenue and to reimburse the Government for the
heavy expense of investigation and the loss resulting from a
taxpayer's fraud. Helvering v. Mitchell, 303 U.S. 391, 401
(1938). Fraud is intentional wrongdoing on the part of the
taxpayer with the specific purpose to evade a tax believed to be
owing. McGee v. Commissioner, 61 T.C. 249, 256 (1973), affd. 519
F.2d 1121 (5th Cir. 1975).
The Commissioner has the burden of proving fraud by clear
and convincing evidence. Sec. 7454(a); Rule 142(b). To satisfy
this burden, the Commissioner must show: (1) An underpayment
exists; and (2) the taxpayer intended to evade taxes known to be
owing by conduct intended to conceal, mislead, or otherwise
prevent the collection of taxes. Parks v. Commissioner, 94 T.C.
654, 660-661 (1990). The Commissioner must meet this burden
through affirmative evidence because fraud is never imputed or
presumed. Beaver v. Commissioner, 55 T.C. 85, 92 (1970).
Fraudulent Intent
The Commissioner must prove that a portion of the
underpayment for each taxable year in issue was due to fraud.
Profl. Servs. v. Commissioner, 79 T.C. 888, 930 (1982). The
existence of fraud is a question of fact to be resolved from the
entire record. Gajewski v. Commissioner, 67 T.C. 181, 199
(1976), affd. without published opinion 578 F.2d 1383 (8th Cir.
1978). Because direct proof of a taxpayer's intent is rarely
available, fraud may be proven by circumstantial evidence, and
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