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check to Yao Min Ting, the person from whom petitioner had
learned the principles and philosophy of Taoism. Petitioner and
Dr. Chan did not discuss a particular amount; instead, Dr. Chan
was to separate his gifts into different installments as he saw
fit. Dr. Chan contradicts this, saying that the money he paid
was a fee for lessons and not a gift.
Dr. Chan credibly testified that the checks were not made
out to petitioner only because petitioner requested that they be
made out in other people's names. Dr. Chan did not question why
petitioner requested that the checks, in payment for lessons
given by himself, were to be made out to other persons. Dr. Chan
considered petitioner his master and therefore felt he was not in
a position to question him. Dr. Chan never met nor received any
services from Yao Min Ting. Shanghai Clinic deducted the amounts
paid for these lessons with petitioner as a business expense.
However, neither Dr. Chan nor his company issued a Form 1099 for
any of the money paid to any individual for petitioner's lessons.
Nonetheless, the notations on almost all of the checks indicate
that they were checks in payment for training or consultation.
OPINION
The Commissioner's deficiency determination is normally
entitled to a presumption of correctness. Rule 142(a); Welch v.
Helvering, 290 U.S. 111, 115 (1933). The Court of Appeals for
the Ninth Circuit, the court to which appeal of this case would
lie, requires that the Commissioner come forward with some
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