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1993 return so that he would not have to pay income tax on that
amount; (6) the tax loss on the unreported income was
approximately $26,959; (7) at the time he filed his 1994 Federal
income tax return, he knew that he had received approximately
$127,509 in total monthly profit income on his CNC investments in
1994; (8) he failed to report this income on his 1994 return so
that he would not have to pay income tax on that amount; (9) the
tax loss on the unreported income was approximately $34,761; and
(10) in attempting to evade the additional taxes, he acted
willfully; that is, he acted voluntarily with the specific intent
to violate a known legal duty.
According to an affidavit submitted by a special agent with
the Criminal Investigation Division of the IRS for the purpose of
calculating petitioner’s offense level under the Sentencing
Guidelines, the IRS followed the definition of “‘tax loss’
contained at U.S.S.G. �2T1.1(c)(1)(A).” The affidavit goes on to
say that “That subsection of the Sentencing Guidelines states
that the tax loss ‘shall be treated as 28% of the unreported
gross income * * * unless a more accurate determination of the
tax loss can be made.’”
OPINION
Respondent bears the burden of proving fraud by clear and
convincing evidence. Sec. 7454(a); Rule 142(b); Sadler v.
Commissioner, 113 T.C. 99, 102 (1999). To satisfy this burden,
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