Sam F. Ford and Ingrid D. Ford - Page 17

                                       - 17 -                                         
          6653(b)(2).  The fraud penalty may be applied against a spouse              
          only where some part of the underpayment is due to the fraud of             
          the spouse.  Sec. 6653(b)(3).                                               
               A.   Underpayment of Tax                                               
               Mr. Ford has acknowledged under oath and while represented             
          by counsel that petitioners’ 1986 return does not report all of             
          their income for 1986 and that this unreported income was subject           
          to significant Federal income tax.  This testimony conclusively             
          establishes the existence of a knowing underpayment by                      
          petitioners.  See Considine v. United States, 683 F.2d 1285, 1287           
          (9th Cir. 1982).                                                            
               B.   Intent To Evade Tax                                               
               Fraudulent intent may be proven by circumstantial evidence             
          because direct proof of a taxpayer’s intent is rarely available.            
          Reasonable inferences may be drawn from the relevant facts.                 
          Spies v. United States, 317 U.S. 492, 499 (1943); Stephenson v.             
          Commissioner, 79 T.C. 995 (1982), affd. 748 F.2d 331 (6th Cir.              
          1984).  Fraud requires a clear and convincing showing that the              
          taxpayer intended to evade a tax known or believed to be owing by           
          conduct intended to conceal, mislead, or otherwise prevent the              
          collection of tax.  Stoltzfus v. United States, 398 F.2d 1002,              
          1004 (3d Cir. 1968).  While a conviction under section 7206(1)              
          does not, in and of itself, establish fraudulent intent, it is a            
          factor from which we “may properly infer fraud” where it is                 






Page:  Previous  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  Next

Last modified: May 25, 2011