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Accordingly, the burden of proof remains on petitioners to
show error in respondent’s determinations.10 As explained below,
petitioners have failed to carry their burden.
II. Respondent’s Determinations of Petitioners’ Income
The evidence in the record shows that petitioners failed to
report substantial amounts of income from Mr. Rinn’s dental
practice for their 1995 through 2000 tax years. RA Hutchinson
properly reconstructed the income, expenses, and net profits from
Mr. Rinn’s dental practice using records that Mrs. Rinn had
prepared in her capacity as primary bookkeeper of that business.
RA Hutchinson reviewed the records with Mrs. Rinn; she explained
the various transactions that were listed; and RA Hutchinson
prepared written summaries on the basis of Mrs. Rinn’s
explanations allowing all the expenses that she had identified.
The notices of deficiency issued to petitioners were prepared on
the basis of the records that Mrs. Rinn provided and RA
Hutchinson’s written summaries.
10 In certain circumstances, courts have required a minimal
factual foundation for the Commissioner’s determinations of
unreported income before the presumption of correctness attaches
to the Commissioner’s determinations in a notice of deficiency.
See, e.g., Portillo v. Commissioner, 932 F.2d 1128 (5th Cir.
1991), affg. in part, revg. in part, and remanding T.C. Memo.
1990-68; Spurlock v. Commissioner, T.C. Memo. 2003-124.
Respondent’s determinations in this case were based on business
records that Mrs. Rinn maintained and provided. These records
provide at least a minimal evidentiary foundation for
respondent’s determinations of unreported income in the notices
of deficiency.
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