Opinion ID: 765233
Heading Depth: 2
Heading Rank: 4

Heading: Failure of Proof of Fraud

Text: 21 In order to avoid the three-year statute of limitations pursuant to the fraud exception under 26 U.S.C. §6501(c)(1), the government must prove that the tax returns filed by the Cotlers were indeed fraudulent.That the government, not the estate, had the burden of proof is in no doubt: In any proceeding involving the issue whether the petitioner has been guilty of fraud with intent to evade tax, the burden of proof in respect of such issue shall be upon the Secretary. 26 U.S.C. §7454(a);see also Anastasato v. Comm'r, 794 F.2d 884, 889 (3rd Cir. 1986) (In a fraud case both the burden of production and the ultimate burden of proof are placed on the Commissioner.).Moreover, the government can only succeed in lifting the bar of the 26 U.S.C. §6501(a) statute of limitations if it proves fraud by clear and convincing evidence. Anastasato, 794 F.2d at 889;see also K.M. Henson v. Comm'r, 835 F.2d 850, 852 (11th Cir. 1988) (It was necessary that the Commissioner establish fraud . . . .). In the instant case, no evidence at all was introduced by the IRS to sustain its burden of proving fraud.The government argues that it need not have proved fraud because it says fraud was admitted by Mrs. Cotler.