Court Opinion

ID: 4477958
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:12:49.012787+00
Date Added: 2024-06-11T15:03:30.581569
License: Public Domain

Raum, /., dissenting: My difficulty with the prevailing opinion is that I don’t know what it holds. Certainly, it doesn’t purport to hold that proof of the contents of a return by secondary evidence is necessarily insufficient in establishing fraud. But here there was evidence as to the amount of tax due that was shown on the return, and that fact could furnish the basis for determining the maximum amount of taxable net income appearing on the return. This is particularly true where petitioner’s exemptions are known, and where, through information supplied by the net worth statement, such items as capital gains or losses, depreciation, and the like are susceptible of reasonable determination. The tax is imposed upon net income, and it might well be immaterial in a particular case whether the Government can show what items of gross income or deduction were reported on the return. Where it shows that the net income was substantially understated, that fact together with other facts of record may be convincing evidence that the return was a fraudulent one. If the majority opinion is to be construed as laying down an inflexible rule that fraud cannot be proved without producing the return or reconstructing all the components of net income appearing on the return, I think it is wrong. It should be sufficient to show by cogent evidence that net income was substantially understated on the return and that, in conjunction with other facts-of record, such understatement was false or fraudulent. Harron and Pierce, agree with this dissent.