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As previously stated, the Commissioner bears the burden of
proving fraud by clear and convincing evidence. Sec. 7454(a);
Rule 142(b). In particular, the Commissioner must prove that the
taxpayer intended to evade taxes known to be owing by conduct
intended to conceal, mislead, or otherwise prevent the collection
of taxes. See Stoltzfus v. United States, 398 F.2d 1002, 1004
(3d Cir. 1968); Rowlee v. Commissioner, 80 T.C. 1111, 1123
(1983). In order to carry this burden, the Commissioner must
prove, for each year before the Court, that (1) an underpayment
of tax exists and that (2) a portion of the underpayment is due
to fraud. Parks v. Commissioner, 94 T.C. 654, 660-661 (1990).
In the instant case, respondent has met his burden and proven
that imposition of the civil fraud penalty for each of the years
in issue is appropriate.
The record in this case clearly supports the finding that
petitioner’s Federal tax returns for 1992, 1993, and 1994 were
fraudulent. In this regard, the record includes an extensive
stipulation of facts that not only details petitioner’s efforts
to commit fraud but also includes petitioner’s express admission
that he filed false returns with intent to evade tax. In short,
petitioner filed fraudulent returns, concealing the fact that he
owed taxes in an attempt to obtain refunds to which he was not
entitled.
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Last modified: November 10, 2007