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1998, Pub. L. 105-206, sec. 3001(a), 112 Stat. 726. Respondent’s
determinations in the notice of deficiency are presumed correct,
and petitioners bear the burden of proving that respondent’s
determinations are incorrect. Rule 142(a)(1). Respondent has
the burden of proof by clear and convincing evidence with respect
to his determination of fraud. Rule 142(a).
II. Period of Limitations on Assessment
Petitioners contend that the 3-year period of limitations on
assessment in section 6501(a) expired before respondent issued
the notice of deficiency and respondent’s assessment is barred.2
Respondent argues that the period of limitations in section
6501(a) does not apply because petitioners filed false or
fraudulent returns with the intent to evade tax for the years at
issue. Sec. 6501(c)(1). Accordingly, our determination of
whether the period of limitations remains open depends on whether
petitioners committed fraud in the filing of their 1993, 1994,
and 1995 returns. 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.
2After trial, respondent moved to amend his answer to
assert, in the alternative, that the period of limitations
remains open due to the 6-year period in sec. 6501(e).
Petitioners objected to respondent’s motion. Because we find
that petitioners committed fraud with respect to their 1993,
1994, and 1995 returns, we deny respondent’s motion as moot.
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