Burden of Proof for the Fraud Penalty

摘要

If a taxpayer has inaccuracies or misstatements on a tax return, the Commissioner of Internal Revenue may impose penalties in addition to levying the correct tax plus interest. Internal Revenue Code (IRC) §6662 provides an accuracy-related penalty on underpayments, and IRC §6663 allows the imposition of a fraud penalty. If any portion of the underpayment is due to fraud, the penalty is another 75% of the underpayment. If the Commissioner demonstrates that at least part of the underpayment is due to fraud, then all of the underpayment is treated as due to fraud unless the taxpayer demonstrates otherwise.