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Commissioner, 38 T.C. 700, 706-707 (1962) (nonfraudulent
carryback); Elmbrook Home, Inc. v. United States, 559 F.Supp. 787
(D.R.I. 1983) (nonfraudulent sec. 1341 adjustment).
Neither side has cited us to, and our research has not
disclosed, any other opinion involving the pattern of events that
we find in the instant cases for 1983.
Respondent contends that petitioner should bear the
consequences of the failure to explain on the record why the 1987
adjustment to his and Betsy’s 1983 tax liability was made.
However, (1) respondent has the burden of proving fraud by clear
and convincing evidence, and (2) we are looking for an
explanation of respondent’s determination, resolving respondent’s
audit. We do not agree that the failure to provide the
explanation should be borne by petitioner.
On answering brief, respondent invokes the Wichita Terminal
doctrine, stating that--
If petitioner really felt that he had such an argument
in this case, he certainly could have testified about
the basis of the examination and submitted himself to
cross-examination on the point, or he could have
offered some other independent evidence of the nature
of the adjustments.
However, respondent overlooks the requirement of the adverse
inference rule that an uncalled witness not only must be within a
party’s power to produce but also must be “peculiarly” within
that party’s power to produce before such an inference may be
drawn against that party. See United States v. Rollins, 862 F.2d
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