Strict requirements for allegations of falsity or fraud

In an en banc decision on July 30 (CTA En Banc Case No. 1191), the Court of Tax Appeals (CTA) reiterated the legal principle that allegations of falsity or fraud in the filing of tax returns must be proven to exist by clear and convincing evidence and cannot be justified by mere speculation. The fraud or falsity contemplated by law is actual and not constructive in nature. Therefore, it must be intentional i.e. a willful and deliberate act of deception with the sole objective of avoiding tax.