- 29 -
founded and accordingly rule that Mr. Shelton's report should not
be received in evidence. Cf. Laureys v. Commissioner, supra.
Our conclusion makes it unnecessary for us to rule on
petitioner's further objection to the admission of Mr. Shelton's
report on the ground that it is significantly inadequate,
particularly in respect of his use of comparables. We are
constrained to add that, even if we had decided to overrule
petitioner's objections and admit Mr. Shelton's report into
evidence, we would have given it minimal weight because of Mr.
Shelton's inexperience at the time of his appraisal, the defects
in the report, such as listing a claimed comparable sale as
having taken place in 1983 instead of 1985, the value he ascribes
to the impact of the change in the Medicare system in 1983, the
failure to take into account the impact of income taxes on his
projected income stream (only partially corrected by the
subsequent adjustment of the report by respondent's National
Office), the internal contradictions reflected in his analysis of
projected profitability, and the seeming excessive value for
goodwill. See Furman v. Commissioner, T.C. Memo. 1998-157.
Mr. Shelton's report represented the bulk of respondent's
case, and its exclusion raises the question of the impact of its
inadmissibility on respondent's burden of proof. The case law is
clear that the determination whether that burden has been
satisfied is not limited to respondent's affirmative evidence but
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