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the Court sustains respondent’s determination disallowing these
expenses.
Section 6663 Penalty
The next issue is whether petitioner is liable for fraud
under section 6663(a) for the years at issue. Generally, in any
case involving the issue of fraud with intent to evade tax, the
burden of proof is on the Commissioner. Sec. 7454(a); Rule
142(b); see supra note 4.
Respondent has the burden of proving by clear and convincing
evidence that (1) petitioner underpaid his tax for each year at
issue, and (2) some part of the underpayment was due to fraud.
Sec. 6663(a); Parks v. Commissioner, 94 T.C. 654, 660-661 (1990).
Fraud means actual, intentional wrongdoing, and the intent
required is the specific purpose to evade a tax believed to be
owing. Candela v. United States, 635 F.2d 1272 (7th Cir. 1980);
Stoltzfus v. United States, 398 F.2d 1002, 1004 (3d Cir. 1968);
Mitchell v. Commissioner, 118 F.2d 308 (5th Cir. 1941), revg. 40
B.T.A. 424 (1939); Wilson v. Commissioner, 76 T.C. 623, 634
(1981). The Commissioner must show that the taxpayer intended to
evade taxes by conduct calculated to conceal, mislead, or
otherwise prevent the collection of taxes. Stoltzfus v. United
States, supra; Marcus v. Commissioner, 70 T.C. 562, 577 (1978),
affd. without published opinion 621 F.2d 439 (5th Cir. 1980).
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