- 17 -
conceal, mislead, or otherwise prevent the collection of such
tax.” Recklitis v. Commissioner, 91 T.C. 874, 909 (1988). Fraud
“does not include negligence, carelessness, misunderstanding or
unintentional understatement of income.” United States v.
Pechenik, 236 F.2d 844, 846 (3d Cir. 1956). Although respondent
bears the burden of proving by clear and convincing evidence that
a taxpayer has filed a fraudulent return with the intent to evade
tax, respondent need not prove the precise amount of the
underpayment resulting from fraud; he must only prove that some
portion of the underpayment of tax for each year is due to fraud.
Niedringhaus v. Commissioner, 99 T.C. 202, 210 (1992).
The existence of fraud is a question of fact to be resolved
upon consideration of the entire record. DiLeo v. Commissioner,
supra at 874. Fraud is never presumed and must be established by
independent evidence of fraudulent intent. Edelson v.
Commissioner, 829 F.2d 828, 833 (9th Cir. 1987), affg. T.C. Memo.
1986-223. Fraud may be shown by circumstantial evidence because
direct evidence of the taxpayer’s fraudulent intent is seldom
available. Gajewski v. Commissioner, 67 T.C. 181, 199 (1976),
affd. without published opinion 578 F.2d 1383 (8th Cir. 1978).
The taxpayer’s entire course of conduct may establish the
requisite fraudulent intent. Stone v. Commissioner, 56 T.C. 213,
223-224 (1971). However, fraud is not proven when a court is
left with only a suspicion of fraud, and even a strong suspicion
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: May 25, 2011