Michael J. Downing and Sandra M. Downing - Page 72

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          Petitioners paid an annual percentage rate of 18.13 percent on at           
          least $5,000 of that amount.  All of the cash advances were taken           
          before Michael bought the Metairie Court property, when,                    
          according to Michael’s testimony, he had cash remaining in the              
          box.  Petitioners have not provided, and we cannot discern, any             
          reasonable explanation for their willingness to pay high interest           
          rates on cash advances when they allegedly had a substantial cash           
          hoard.                                                                      
               Based on the foregoing indicia of fraud, we conclude that              
          respondent has proved by clear and convincing evidence that some            
          or all of the underpayments of tax that result from Michael’s               
          failure to report all of his plumbing business Schedule C gross             
          receipts were due to Michael’s fraud.  We have so found.                    
               We hold for respondent on this issue.                                  
          C.  Amounts; Burdens of Proof                                               
               In parts II-A and II-B of this opinion, respondent had the             
          burden of proving, by clear and convincing evidence, that there             
          were underpayments of tax, some part of which was due to                    
          Michael’s fraud; respondent carried this burden for each year in            
          issue.                                                                      
               (1)  Under section 6663(b), the entire underpayment of tax             
          for each year is treated as attributable to fraud, “except with             
          respect to any portion of the underpayment which the taxpayer               








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