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The Commissioner bears the burden of proof with respect to the
imposition of the fraud penalty for each year. Sec. 7454(a);
Rule 142(b). The Commissioner must establish by clear and
convincing evidence: (1) There is an underpayment of tax; and
(2) some part of the underpayment of tax is due to fraud.
Bradford v. Commissioner, 796 F.2d 303, 307 (9th Cir. 1986),
affg. T.C. Memo. 1984-601; Powell v. Granquist, 252 F.2d 56, 60-
61 (9th Cir. 1958); Hebrank v. Commissioner, 81 T.C. 640, 642
(1983). If the Commissioner establishes that any portion of an
underpayment is attributable to fraud, then the entire
underpayment is treated as being attributable to fraud, except
with respect to any portion of the underpayment which the
taxpayer establishes by a preponderance of evidence is not
attributable to fraud. Sec. 6663(b).
To prove the existence of an underpayment, the Commissioner
may not rely on a taxpayer’s failure to carry his or her burden
of proof with respect to the underlying deficiency. Parks v.
Commissioner, 94 T.C. 654, 660-661 (1990). However, the
Commissioner need not prove the precise amount of the
underpayment, but only that an underpayment exists. Niedringhaus
v. Commissioner, 99 T.C. 202, 210 (1992); Petzoldt v.
Commissioner, 92 T.C. 661, 699-700 (1989).
The amended return filed for each year in issue in this case
demonstrates that petitioner underpaid his tax on the original
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