Frank H. and Marla C. Black - Page 23

                                       - 23 -                                         
          for petitioners’ family and what portion for the employees.                 
          Thus, we are unable to estimate an amount deductible under                  
          section 162(a).  See Cohan v. Commissioner, 39 F.2d 540, 543-544            
          (2d Cir. 1930); Vanicek v. Commissioner, 85 T.C. 731, 742-743               
               Petitioners challenge several other aspects of respondent’s            
          net worth computation.  Many of petitioners’ arguments confuse              
          benefits provided by an employer to an employee with those                  
          provided by a self-employed individual to himself.  Additionally,           
          petitioners attempt to attribute some payments to Frank Black,              
          Inc.  However, Frank Black, Inc., did not have any bank or other            
          accounts in 1992, nor did it transact any business or have any              
          B.  Proof That the Underpayment Was Due to Fraud                            
               Section 6663 imposes a penalty equal to 75 percent of the              
          portion of any underpayment which is attributable to fraud.  Sec.           
          6663(a).  The penalty in the case of fraud is a civil sanction              
          provided primarily as a safeguard for the protection of the                 
          revenue and to reimburse the Government for the heavy expense of            
          investigation and the loss resulting from a taxpayer’s fraud.               
          Helvering v. Mitchell, 303 U.S. 391, 401 (1938).  Fraud is                  
          intentional wrongdoing on the part of the taxpayer with the                 
          specific purpose to evade a tax believed to be owing.  McGee v.             
          Commissioner, 61 T.C. 249, 256 (1973), affd. 519 F.2d 1121 (5th             

Page:  Previous  16  17  18  19  20  21  22  23  24  25  26  27  28  29  30  Next 

Last modified: March 27, 2008