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Mr. Strong’s testimony credible and do not accept his explanation
for the income deposited into his bank account. He admitted in
his testimony that he considered the money in account No.
893315300 his personal funds. The factors indicating fraud weigh
heavily against Mr. Strong. Respondent has shown by clear and
convincing evidence that Mr. Strong fraudulently underpaid his
taxes for 1990, 1991, 1992, 1993, and 1994. Therefore, he is
liable for the fraud penalty under section 6663 for each year in
issue.
B. Additions to Tax for Failure To File--SCC
Respondent asserts that SCC is liable for the addition to
tax under section 6651(f) for fraudulent failure to file a
return, or, in the alternative, that SCC is liable for the
addition to tax for failure to file a return under section
6651(a)(1) for each of the years 1990, 1991, 1992, 1993, and
1994. Corporations subject to taxation must file Federal income
tax returns. Sec. 6012(a)(2). If a corporation fails to file a
return, the Commissioner may impose an addition to tax of 5
percent per month of the amount of tax required to be shown on
the return, to a maximum of 25 percent. Sec. 6651(a)(1). If the
failure to file is fraudulent, the addition to tax is increased
to 15 percent per month of the tax required to be shown on the
return, to a maximum of 75 percent. Sec. 6651(f). We consider
the same factors under section 6651(f) that are considered in
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