- 19 - The determination of fraud for purposes of section 6501(c)(1) is the same as the determination of fraud for purposes of the penalty under section 6663. Neely v. Commissioner, 116 T.C. 79, 85 (2001); Rhone-Poulenc Surfactants & Specialties v. Commissioner, 114 T.C. 533, 548 (2000). Respondent has the burden of showing fraud by clear and convincing evidence. See sec. 7454(a); Rule 142(b). Petitioner’s conviction under section 7206(1) does not prove fraud; respondent must show that petitioner intended to evade tax in filing the false returns. See Wright v. Commissioner, 84 T.C. 636, 643 (1985). For Federal tax purposes, fraud entails intentional wrongdoing with the purpose of evading a tax believed to be owing. See Neely v. Commissioner, supra at 86. In order to show fraud, respondent must prove: (1) An underpayment exists; and (2) petitioner intended to evade taxes known to be owing by conduct intended to conceal, mislead, or otherwise prevent the collection of taxes. See Parks v. Commissioner, 94 T.C. 654, 660-661 (1990). A. Underpayment of Tax Respondent must first show by clear and convincing evidence that petitioner made an underpayment of tax in each of 1990, 1991, 1992, and 1993. Respondent may not rely on petitioner’s failure to carry his burden of proof to sustain respondent’s burden of proving fraud. See id. at 661. We conclude thatPage: Previous 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Next
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