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Petitioner offered no evidence showing that respondent’s
determination was erroneous.5 We conclude that petitioner’s
deficiency for 1985 is the amount that respondent determined.
D. Whether Petitioner Is Liable for the Addition to Tax for
Fraud
1. Background
Respondent contends that petitioner is liable for the
addition to tax for fraud under section 6653(b) for 1985.6 Fraud
is actual, intentional wrongdoing designed to evade a tax
believed to be owing. Webb v. Commissioner, 394 F.2d 366, 377
(5th Cir. 1968), affg. T.C. Memo. 1966-81. To prevail under
section 6653(b)(1), the Commissioner must prove by clear and
convincing evidence: (1) Petitioner underpaid tax for 1985, and
(2) some part of the underpayment is due to fraud. Secs.
6653(b), 7454(a); Rule 142(b); Parks v. Commissioner, 94 T.C.
654, 660-661 (1990); Petzoldt v. Commissioner, 92 T.C. 661, 699
(1989). The fact that petitioner failed to meet his burden of
proof on the underlying deficiency in this case does not relieve
respondent of the burden to prove, by clear and convincing
5 Petitioner made no argument about respondent’s
determination. At trial and in his posttrial briefs, he argued
only that respondent had unclean hands and that the Government
had lost or destroyed exculpatory evidence.
6 For 1985, the addition to tax for fraud consists of 50
percent of the underpayment amount, sec. 6653(b)(1), plus 50
percent of the interest due on the portion of the underpayment
attributable to fraud, sec. 6653(b)(2).
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