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failing to file a timely income tax return for FYE 1993. Vortex
filed its Federal income tax return for FYE 1993 in October 1995,
after respondent issued to Vortex the notice of deficiency dated
August 23, 1995.
We examine the same badges of fraud we used when considering
the imposition of the fraud penalty under section 6663(a) to
decide whether Vortex is liable for the addition to tax for
fraudulently failing to file a timely tax return under section
6651(f). Clayton v. Commissioner, 102 T.C. 632, 653 (1994). Our
analysis, however, necessarily must focus on the taxpayer’s
decision not to file its return when due for it is only if that
decision was made with the intent to evade tax that the addition
to tax under section 6651(f) may properly be imposed. Respondent
bears the burden of proving by clear and convincing evidence that
an underpayment exists and that the taxpayer intended to conceal,
mislead, or otherwise prevent the collection of taxes by not
filing his return when due. Parks v. Commissioner, 94 T.C. 654,
660-661 (1990).
13(...continued)
is not filed, not to exceed 25 percent in the aggregate. If any
failure to file a return is fraudulent, sec. 6651(f) increases
the additions to tax imposed under sec. 6651(a) to 15 percent of
the net amount of tax due for each month that the return is not
filed, up to a maximum of 75 percent.
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