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taxpayer’s return for that year was filed. Sec. 6501(a).
However, in cases where a party files a false or fraudulent
return with the intent to evade tax, the tax may be assessed at
any time. Sec. 6501(c)(1). Respondent argues that Vortex and
the Zhadanovs fraudulently understated their income for all the
years at issue and that, therefore, the exception under section
6501(c)(1) to the general 3-year limitations rule of section
6501(a) applies.11
Respondent bears the burden of proving that an exception to
the general 3-year limitation period set forth in section 6501(a)
applies. Rule 142(b); Harlan v. Commissioner, 116 T.C. 31, 39
(2001). In order to rely upon the fraud exception under section
6501(c)(1), respondent must prove the same elements as he must
prove to impose an addition to tax for fraud under prior section
6653(b). Mobley v. Commissioner, T.C. Memo. 1993-60, affd.
without published opinion 33 F.3d 1382 (11th Cir. 1994). The
elements that must be proved to support the imposition of the
fraud addition to tax under prior section 6653(b) are essentially
the same elements that must be proved to impose the fraud penalty
11Respondent also argues that the 6-year period of
limitations provided in sec. 6501(e) applies to petitioners if we
conclude that sec. 6501(c)(1) is not applicable. Sec. 6501(e)
provides that tax may be assessed at any time within 6 years
after a return is filed that omits from gross income an amount
exceeding 25 percent of the amount of gross income stated in the
return.
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