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has an established pattern of falsifying documents. Because
petitioner failed to introduce any credible evidence, we find
that he is not entitled to the additional deductions he claimed.
D. Section 167 Deductions
On Schedules C, Profit or Loss From Business, petitioner and
Ms. McNamara claimed depreciation deductions of $3,270 in 1989
and $2,003 in 1990. In the notice of deficiency, respondent
disallowed $3,097 in 1989 and $1,658 in 1990 of the claimed
deductions. Petitioner contends that he is entitled to these
depreciation deductions; however, petitioner failed to produce
evidence to support his contention. We sustain respondent’s
determination with respect to the disallowed deductions.
III. Fraud
In the notice of deficiency, respondent determined that
petitioner is liable for an addition to tax for fraud pursuant
section 6653(b)(1) in 1988 and for penalties for fraud under
section 6663 in 1989 and 1990. With respect to fraud, the
Commissioner bears the burden of proving by clear and convincing
evidence that (1) the taxpayer has an underpayment of tax in each
taxable year, and (2) at least some portion of the underpayment
is attributable to fraud. Sec. 7454(a); Rule 142(b). If the
Commissioner establishes that any portion of the underpayment of
tax is attributable to fraud, the entire underpayment is treated
as attributable to fraud, except for any portion of the
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