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In this Court, petitioners conceded that respondent’s notice
of deficiency did not include this $2.8 million. While
petitioners now claim in their brief that respondent erred in
calculating this amount, we conclude to the contrary. Mr. Ford’s
words, which were spoken under oath on at least two occasions
while represented by counsel, are clear and unambiguous. We
conclude that petitioners failed to report this other $2.8
million from the sale of securities.6
III. Fraud
We decide whether petitioners are liable for the above-
mentioned additions to tax for fraud under section 6653(b)(1)(A)
and (B).7 Respondent must prove his determination of fraud by
6 Our decision as to this $2.8 million and the approximately
$5 million above is also consistent with our finding that the
nominee corporations controlled by petitioners failed to
recognize income totaling more than Can$ 8 million.
7 In relevant part, sec. 6653(b) provides:
(1) In general.--If any part of any underpayment (as
defined in subsection (c)) of tax required to be shown on
a return is due to fraud, there shall be added to the tax
an amount equal to the sum of--
(A) 75 percent of the portion of the underpayment
which is attributable to fraud, and
(B) an amount equal to 50 percent of the interest
payable under section 6601 with respect to such portion
for the period beginning on the last day prescribed by
law for payment of such underpayment (determined without
regard to any extension) and ending on the date of the
assessment of the tax or, if earlier, the date of the
(continued...)
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