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to the 1984 and 1986 IRP's) omitted so large a portion of
petitioner's royalty income, (3) ask any further questions of
Burns, or (4) in any other way attempt to clarify this matter.
On brief, respondent relies only on the notice of deficiency and
presumption of correctness. Respondent ignores the discrepancy
between Exhibit J and the notice of deficiency. Respondent also
ignores Burns' testimony.
Burns testified that he was "positive" that respondent had
copies of the relevant Forms 1099. Under these circumstances, we
may consider that the Forms 1099 would not support respondent's
determination. See Wichita Terminal Elevator Co. v.
Commissioner, 6 T.C. 1158, 1165 (1946), affd. 162 F.2d 513, 515-
516 (10th Cir. 1947).
From the foregoing we conclude, and we have found (supra
table 6), that petitioner reported all his royalty income for
1985.
We hold for petitioner on this issue.
(3) 1983
If petitioner's records are not sufficient to determine his
correct tax liability, then respondent is authorized to
reconstruct income utilizing a method which is reasonable in
light of all surrounding facts and circumstances. Petzoldt v.
Commissioner, 92 T.C. at 687.
Petitioner did not provide respondent with records for 1983
sufficient for respondent to determine petitioner's 1983 royalty
income. Consequently, respondent determined petitioner's 1983
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