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illegal political campaign contributions. On November 8, 1989,
Patrick King, a former vice chairman of Vernon's board of
directors, was convicted of making false entries in Vernon books,
reports, and statements, and of using Vernon funds to make
illegal campaign contributions. On April 10, 1990, Lemons was
convicted of misapplying Vernon funds and accepting a bribe.
Petitioner was not indicted for or convicted of any crimes
relating to Vernon.
OPINION
A. Burden of Proof
We first decide whether respondent's contention that
petitioners' worthless stock deduction for Dondi Financial stock
in 1987 was taken in the wrong year is new matter on which
respondent bears the burden of proof.
1. Burden of Proof If Respondent Raises New Matter
or An Increased Deficiency in An Amended Answer
The taxpayer generally bears the burden of proof. Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). However,
if the Commissioner pleads new matter or an increased deficiency
in the answer, the Commissioner has the burden of proof as to the
new matter or increased deficiency. Rule 142(a). A new position
taken by the Commissioner is not new matter if it clarifies and
is consistent with the original determination and does not
increase the deficiency. Estate of Jayne v. Commissioner, 61
T.C. 744, 748-749 (1974); McSpadden v. Commissioner, 50 T.C. 478,
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