- 7 -
(1977), to which we defer in accordance with the doctrine of
Golsen v. Commissioner, 54 T.C. 742 (1970), affd. 445 F.2d 985
(10th Cir. 1971), we must examine the record to determine whether
there is a minimal evidentiary foundation supporting respondent’s
determination of unreported income.1 If there is not,
respondent’s determination will be deemed arbitrary and,
consequently, she will lose her presumption of correctness and
will be forced to go forward with the evidence. Weimerskirch v.
Commissioner, supra. The record, however, does contain evidence
supporting respondent’s determination of unreported income, and,
therefore, the burden of proof remains entirely with petitioner.
1 Although Weimerskirch v. Commissioner, 596 F.2d 358 (9th
Cir. 1979), revg. 67 T.C. 672 (1977), dealt specifically with
illegal unreported income, it is now well established that the
Court of Appeals for the Ninth Circuit applies the Weimerskirch
rule in all cases of unreported income where the taxpayer
challenges the Commissioner’s determination on the merits. E.g.,
Edwards v. Commissioner, 680 F.2d 1268, 1270 (9th Cir. 1982) (in
that case, involving unreported income from an income-generating
auto repair business owned by the taxpayer, the court stated:
“We note, however, that the Commissioner’s assertion of
deficiencies are presumptively correct once some substantive
evidence is introduced demonstrating that the taxpayer received
unreported income. Weimerskirch v. Commissioner, 596 F.2d 358,
360 (9th Cir. 1979).”); Petzoldt v. Commissioner, 92 T.C. 661,
689 (1989) ("the Ninth Circuit requires that respondent come
forward with substantive evidence establishing a ‘minimal
evidentiary foundation’ in all cases involving the receipt of
unreported income to preserve the statutory notice's presumption
of correctness. Weimerskirch v. Commissioner, 596 F.2d at 362."
(Emphasis added.)); Roat v. Commissioner, 847 F.2d 1379, 1382
(9th Cir. 1988) (Commissioner can rely on the presumption that
his determination is correct if taxpayer does not contest the
determination on the merits).
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011