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Respondent's opening and only brief does not reconcile the
differences between respondent's notices of deficiency and the
stipulated bank record exhibits.16 As a starting place for the
deficiency calculations, Schedules C in the deficiency notices
listed certain amounts as the total deposits, from which the net
unexplained bank deposits were then calculated. For 1986, these
16These differences and the failure of those exhibits to
fully substantiate the amounts that respondent presents in the
notices of deficiency bring up the issue of who bears what
burden, especially in regard to the accuracy of the computations
in the notice of deficiency.
Judge Tannenwald, in his concurring opinion in Llorente v.
Commissioner, 74 T.C. 260, 275 (1980) (Tannenwald, J.,
concurring), affd. in part and revd. and remanded in part 649
F.2d 152 (2d Cir. 1981), wrote that "All of the decided cases are
in agreement that the presumption of correctness of a notice of
deficiency does not cause the notice to be evidence as such, and,
that, at least initially, the taxpayer has the burden of proof."
(Citations omitted.) He later wrote that "This Court has
consistently made it clear that, even in cases involving
unreported income, we will only shift to respondent the burden of
coming forward with evidence". O'Reilly v. Commissioner, T.C.
Memo. 1994-61. In the seminal unreported income from illegal
activities case, Weimerskirch v. Commissioner, 596 F.2d 358, 361
(9th Cir. 1979), revg. 67 T.C. 672 (1977), the Commissioner
failed to produce any records to "substantiate the computations
made by the IRS agent", which was one component of a decision by
the Court of Appeals for the Ninth Circuit to require some
linkage between the taxpayer's unreported income and alleged
illegal activity.
The situation here is somewhat different. Respondent made
deficiency determinations and then conceded certain items. She
also stipulated to the bank exhibit records, thus satisfying her
burden of coming forward with evidence. A problem arises because
that evidence does not match the determinations in the notices of
deficiency, and respondent's brief does not explain the
differences. However, for the reasons described above, the
burden of proof has not shifted from petitioner.
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