- 8 -
income, the burden is on the taxpayer to demonstrate that the
Commissioner’s determination is erroneous. Mallette Bros.
Constr. Co. v. United States, 695 F.2d 145, 148-149 (5th Cir.
1983); Kling v. Commissioner, T.C. Memo. 2001-78; Seidenfeld v.
Commissioner, T.C. Memo. 1995-61. In deciding whether
petitioners have carried their burden of proof, witness
credibility is an important consideration. See Ishizaki v.
Commissioner, T.C. Memo. 2001-318. The only support for Mr.
Hamilton’s use of the cash to pay for business expenses is his
own uncorroborated and self-serving testimony, which we are not
required to accept, and which we do not, in fact, find to be
credible. See Niedringhaus v. Commissioner, 99 T.C. 202, 219
(1992). Accordingly, petitioners have failed to meet their
burden, and thus we sustain respondent’s determination that
petitioners failed to report $515,993 of income in 1988.
B. Whether Mr. Hamilton Is Liable for the Fraud Addition to Tax
Under Section 6653
Section 6653(b)(1) provides that if any part of a taxpayer’s
underpayment is due to fraud, an addition to tax equal to 75
percent of the underpayment will be imposed. Further, if any
portion of the underpayment is attributable to fraud, the entire
underpayment will be treated as attributable to fraud unless the
taxpayer establishes otherwise. Sec. 6653(b)(2). In order for
the fraud additions to tax to apply, the Commissioner must prove
by clear and convincing evidence that an underpayment exists and
that some portion of the underpayment is attributable to fraud.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011