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With respect to the first prong of the test, the
Commissioner need not prove the precise amount of the
underpayment resulting from fraud, but only that some part of the
underpayment of tax for each year in issue is attributable to
fraud. Lee v. United States, 466 F.2d 11, 16-17 (5th Cir. 1972);
Plunkett v. Commissioner, 465 F.2d 299, 303 (7th Cir. 1972),
affg. T.C. Memo. 1970-274. The Commissioner may not, however,
simply rely upon the taxpayer’s failure to show error in the
determinations of the deficiencies. DiLeo v. Commissioner, 96
T.C. 858, 873 (1991), affd. 959 F.2d 16 (2d Cir. 1992); Petzoldt
v. Commissioner, supra at 700.
The Commissioner must show that the taxpayer intended to
evade taxes known or believed to be owing by conduct intended to
conceal, mislead, or otherwise prevent the collection of taxes.
Korecky v. Commissioner, supra at 1568; Rowlee v. Commissioner,
80 T.C. 1111, 1123 (1983). Fraud is not to be imputed or
presumed, but rather must be established by some independent
evidence of fraudulent intent. Beaver v. Commissioner, 55 T.C.
85, 92 (1970); Otsuki v. Commissioner, 53 T.C. 96, 106 (1969).
However, fraud need not be established by direct evidence, which
is rarely available, but may be proved by surveying the
taxpayer’s entire course of conduct and drawing reasonable
inferences therefrom. Spies v. United States, 317 U.S. 492, 499
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