dissenting: There can be no question but that in any proceeding involving the issue of fraud, the burden of proof is upon the Commissioner. The difference of opinion is when fraud is involved. I believe that a taxpayer charged with fraud in .the notice of deficiency is not obligated to raise the question unless he sees fit to do so, and if he does not, the question is not involved in the proceeding before us. In a criminal case of course the burden of proof is upon the state to prove that the accused is guilty, but the accused has the right to plead guilty if he so desires, and in a proceeding before the Board involving fraud the taxpayer is not required to present the issue. If he does not deny it, or if for any other reason he does not care to have the matter presented to the Board for decision, he does not have to do so.
In my opinion, it is only when the taxpayer denies fraud that the burden of proof to establish it is upon the Commissioner. This issue must be raised in the first instance, in my opinion, by the taxpayer denying guilt of fraud as determined by the Commissioner in the notice of deficiency. We are authorized by statute to establish rules of procedure and unless such rules are contrary to statute they have the force and effect of law.
Section 601 of the Bevenue Act of 1928, quoted in the concurring opinion of Member McMahon, provides that in any proceeding involving the issue whether the petitioner has been guilty of fraud, etc., the burden of proof in respect of such issue shall be upon the Commissioner. The concurring opinion referred to emphasizes *1022the word “ involving.” He states that the word “ issue ” as here used is not qualified by the word “ pleaded ” or by the words “ raised by the pleadings ”, or by the words “ pleaded under the rules of the Board.” In my opinion, however, the emphasis should be laid upon the word “ issue ” and there can be no issue in the absence of pleadings to raise an issue. This being true, I see no objection in the statute to the rule of the Board requiring issues to be joined in pleadings. When the 1928 Act was passed the Board had been operating since 1924 upon the principle of pleadings wherein issues were required to be raised thereby. It would seem, therefore, that when the statute provided that the burden of proof was on the respondent when the issue of fraud is involved, Congress had reference to the methods by which issues were presented before the Board. I therefore think that if the issue is not presented before the Board, the Board has no jurisdiction either to affirm or disaffirm the Commissioner on the question of fraud and, since the taxpayer has not denied fraud, the fraud penalty would stand without any action by the Board. It is a simple matter for a taxpayer to present the issue of fraud in a pleading like any other issue in the case and when he does the Commissioner must prove it. After raising the issue the taxpayer may remain silent. But when the Commissioner determines fraud in a notice of deficiency, in my opinion, it is not an issue until the taxpayer denies it. If he denies it in his petition there is no presumption that the Commissioner’s determination is correct. The presumption then is, of course, that the taxpayer is not guilty. The question, however, as to presumption arises only with respect to issues before us.