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Respondent has proven by clear and convincing evidence that
petitioner received taxable income of $137,04386 in 1988.
Respondent has also proven that petitioner is liable for self-
employment taxes of $5,859 for 1988. Respondent has proven an
underpayment for 1988 by clear and convincing evidence.
5. Conclusion
Respondent has proven underpayments by clear and convincing
evidence for 1985, 1986, 1987, and 1988.
B. Fraudulent Intent
1. Clear and Convincing Evidence of Fraud
Respondent must show that a portion of the underpayment is
attributable to fraud. Fraud is established where the
Commissioner shows that “the taxpayer intended to evade taxes
that he knew or believed to be owing by conduct intended to
conceal, mislead or otherwise prevent the collection of such
taxes.” Korecky v. Commissioner, 781 F.2d 1566, 1568 (11th Cir.
1986), affg. T.C. Memo. 1985-63; see also Webb v. Commissioner,
394 F.2d 366, 377 (5th Cir. 1968), affg. T.C. Memo. 1966-81;
Rowlee v. Commissioner, 80 T.C. 1111, 1123 (1983); Clark v.
Commissioner, T.C. Memo. 2001-205. Suspicion of fraudulent
conduct is not sufficient. King’s Court Mobile Home Park, Inc.
v. Commissioner, 98 T.C. 511, 517 (1992). The issue of
fraudulent intent is a question of fact shown by surveying the
86Total income proven of $487,504 less allowable deductions
of $350,461 equals $137,043 in taxable income.
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