- 43 -
burden for a year, respondent must prove two elements, as
follows: (1) That Michael has an underpayment of tax for that
year, and (2) that some part of the underpayment is due to fraud.
See sec. 7454(a);22 Rule 142(b); see, e.g., Carter v. Campbell,
264 F.2d 930, 936 (5th Cir. 1959); Stone v. Commissioner, 56 T.C.
213, 220 (1971); Otsuki v. Commissioner, 53 T.C. 96, 105-106
(1969).23 Each of the elements must be proven by clear and
convincing evidence. See DiLeo v. Commissioner, 96 T.C. 858, 873
(1991), affd. 959 F.2d 16 (2d Cir. 1992); Parks v. Commissioner,
94 T.C. 654, 663-664 (1990).
For this purpose, respondent need not prove the precise
amount of the underpayment resulting from fraud, but only that
there is some underpayment and that some part of it is
attributable to fraud. See, e.g., Lee v. United States, 466 F.2d
11, 16-17 (5th Cir. 1972); Plunkett v. Commissioner, 465 F.2d
299, 303 (7th Cir. 1972), affg. T.C. Memo. 1970-274. In carrying
this burden, respondent may not rely on petitioners’ failure to
22 SEC. 7454. BURDEN OF PROOF IN FRAUD, FOUNDATION
MANAGER, AND TRANSFEREE CASES.
(a) Fraud.-- In any proceeding involving the issue
whether the petitioner has been guilty of fraud with intent
to evade tax, the burden of proof in respect of such issue
shall be upon the Secretary.
23 The elements of fraud under sec. 6663 are essentially
the same as those we considered under sec. 6653(b) of prior law.
See also Rhone-Poulenc Surfactants v. Commissioner, 114 T.C. 533,
547-548 (2000); Clayton v. Commissioner, 102 T.C. 632, 652-653
(1994); Houser v. Commissioner, 96 T.C. 184, 185 n.1 (1991).
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