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With respect to the fraud penalty under section 6663(a) that
respondent determined against petitioner for each of his taxable
years 1990 and 1991, section 6663(a) imposes a penalty equal to
75 percent of the portion of any underpayment that is attribut-
able to fraud. For purposes of section 6663(a), if the Commis-
sioner of Internal Revenue (Commissioner) establishes that any
portion of an underpayment is attributable to fraud, the entire
underpayment is to be treated as attributable to fraud, except
with respect to any portion of the underpayment that the taxpayer
establishes by a preponderance of the evidence is not attribut-
able to fraud. Sec. 6663(b). In order for the fraud penalty to
apply, the Commissioner must prove by clear and convincing
evidence, sec. 7454(a); Rule 142(b), that an underpayment exists
and that some portion of such underpayment is attributable to
fraud. Niedringhaus v. Commissioner, 99 T.C. 202, 210 (1992).
To prove the existence of an underpayment, the Commissioner
5(...continued)
from the IRS admitting to losing/misplacing
Mr. Duncan’s and Duncan & Associates’ files.
6. Petitioner and legal counsel Mr. Fred Fore-
man, former U.S. attorney [sic] for the 7th
District, requested on numerous occasions
amounts due and owing the IRS for tax years
1990 and 1991 only to be told that cases
involving fraud or allegations of fraud could
not be paid until concluded.
We note that the so-called mitigating circumstances quoted above
in paragraph 2 of petitioner’s response is inconsistent with
petitioner’s petition in which he alleges that his records for
the years at issue “were discarded due to their age”.
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