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301; Bardwell v. Commissioner, 38 T.C. 84, 92 (1962), affd. 318
F.2d 786 (10th Cir. 1963).
Respondent contends that respondent has 6 years to assess
tax under section 6501(e)(1)(A) because petitioner omitted more
than 25 percent of his gross income for 1993. Although
respondent must prove fraud by clear and convincing evidence,
respondent need only prove a 25-percent omission from income by a
preponderance of the evidence. Armes v. Commissioner, 448 F.2d
972, 974-975 (5th Cir. 1971), affg. in part and revg. in part
T.C. Memo. 1969-181.
For purposes of section 6501(e)(1)(A)(i), “gross income”
includes the amounts received or accrued from the sale of goods
or services without considering the cost of those sales or
services. Id.; sec. 301.6501(e)-1(a)(1)(ii), Proced. & Admin.
Regs. Thus, we do not consider petitioner’s costs of goods sold
in deciding whether he omitted 25 percent of his gross income for
a year.
Petitioner and Ms. Shaw reported gross receipts of $26,810
on Schedule C of their 1993 return. We need not decide whether
to calculate the 25 percent omission based on the amount
petitioner reported ($0), or the amount reported on the purported
joint return ($26,810), if respondent shows that petitioner
omitted more than $6,701.50 (25 percent of $26,810). Respondent
made that showing because petitioner concedes that he had
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