John V. Maher - Page 10

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          that petitioner had the specific intent to evade taxes with                 
          respect to the money he obtained from the Kieffers.                         
          Accordingly, we hold that respondent has not carried his burden             
          of proving fraud by clear and convincing evidence.                          
          II.  Period for Assessment                                                  
               Because we hold that petitioner is not liable for the fraud            
          penalty, the exception of section 6501(c)(1) (permitting tax to             
          be assessed at any time in the case of a false or fraudulent                
          return with the intent to evade) is inapplicable.  At trial,                
          respondent conceded that the exception of section 6501(e) is                
          also inapplicable for 1995 because the $9,500 of gross income               
          petitioner omitted from his 1995 return is less than 25 percent             
          of the $61,725 of gross income he reported.  Respondent has not             
          established that any other exception to the general 3-year                  
          limitation period applies for 1995.  Accordingly, respondent is             
          time barred from assessing petitioner’s 1995 taxes.                         
               Petitioner has not pleaded or argued the statute of                    
          limitations with respect to respondent’s assessment of his 1996             
          taxes; we deem petitioner to have conceded any such issue.  In              
          any event, the exception of section 6501(e) is applicable,                  
          inasmuch as the amount of income petitioner omitted exceeded 25             
          percent (in fact, over 100 percent) of the gross income stated              
          on his 1996 return.  Accordingly, respondent is not time barred             
          from assessing petitioner’s 1996 taxes.                                     






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