Blau v. Commissioner

Memorandum Opinion

VAN FOSSAN, Judge: The respondent determined deficiencies and penalties in income tax in the amounts and for the calendar years, as follows:

These cases came on for hearing on the circuit calendar at New York, New York. There was no appearance by, or on behalf of, petitioners. Accordingly, respondent moved for judgment on all phases of the cases on which the taxpayers had the burden of proof. There being no evidence of error committed by the respondent and the posture of the parties being as stated, the motion is granted and the presumption of correctness accorded to respondent's determination of deficiencies and penalties, *118 excepting fraud, ripens into a conclusive presumption, and respondent's determination is approved.

The burden of proving fraud rests on the respondent and such proof must be clear and convincing.

Respondent proceeded to produce evidence calculated to sustain his finding of fraud.

We have studied the evidence with care but are unable to hold that it is of such character and degree as to be clear and convincing. It is not enough that a taxpayer may have been moved by fraudulent intent or that some of the evidence suggests fraud. There must be present more than a possibility or a mere suspicion. As above stated, the proof must be clear and convincing. This test, the record does not satisfy. Accordingly, we hold that the Government has not succeeded in proving fraud.

Decisions will be entered under Rule 50.