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taxpayer with the specific purpose to evade a tax believed to be
owing. McGee v. Commissioner, 61 T.C. 249, 256 (1973), affd. 519
F.2d 1121 (5th Cir. 1975).
The Commissioner has the burden of proving fraud by clear
and convincing evidence. Sec. 7454(a); Rule 142(b). To satisfy
this burden, the Commissioner must show: (1) An underpayment
exists; and (2) the taxpayer intended to evade taxes known to be
owing by conduct intended to conceal, mislead, or otherwise
prevent the collection of taxes. Parks v. Commissioner, 94 T.C.
654, 660-661 (1990). The Commissioner must meet this burden
through affirmative evidence because fraud is never imputed or
presumed. Beaver v. Commissioner, 55 T.C. 85, 92 (1970).
A. Underpayment of Tax
The Commissioner has established by clear and convincing
evidence an underpayment of tax by petitioner for each of the
years in issue; namely, specific items of income deposited into
petitioner’s Merrill Lynch account that petitioner did not report
as income.
B. Fraudulent Intent
The Commissioner must prove that a portion of the
underpayment for each taxable year in issue was due to fraud.
Profl. Servs. v. Commissioner, 79 T.C. 888, 930 (1982). The
existence of fraud is a question of fact to be resolved from the
entire record. Gajewski v. Commissioner, 67 T.C. 181, 199
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