- 18 - 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 originalPage: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Next
Last modified: May 25, 2011