New York Guangdong Finance, Inc. - Page 10




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               The total payments made on the GITIC loan for 1995 and 1996            
          and the total payments made on the GXE loan for 1995 and 1996, as           
          summarized above, coincide with the amounts set forth in                    
          petitioner’s September 8, 1998, letter.  However, a comparison of           
          the Forms 5472 that petitioner attached to its Forms 1120X for              
          1995 and 1996 with the interest amounts in the September 8, 1998,           
          letter reveals the following:                                               
                                        1995                     1996                 
          Interest paid to                                                            
          GITIC per 9/8/98 letter       $177,010.41         $139,798.61               
          Interest paid to GXE                                                        
          per 9/8/98 letter              164,762.08           77,099.91               
          Total Interest                                                              
          per 9/8/98 letter             341,772.49          216,898.52                
          Interest reported as paid                                                   
          to GXE on Forms 5472                                                        
          attached to amended returns  341,772.49             99,666.39               
          Difference                    -0-                 117,232.13                

                                        OPINION                                       
          I.   Burden of Proof                                                        
               Generally, the Commissioner’s determination is presumed                
          correct, and the taxpayer bears the burden of proving that the              
          determination is erroneous.  Rule 142(a)(1); Welch v. Helvering,            
          290 U.S. 111, 115 (1933).  Petitioner argues, however, that the             
          burden of proof should shift to respondent because the notice of            








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