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(1974); Weimerskirch v. Commissioner, supra. We have looked
behind the notice in those rare instances where respondent relied
upon a "'naked' assessment without any foundation whatsoever".
United States v. Janis, 428 U.S. 433, 441 (1976); Jackson v.
Commissioner, supra at 401.
In Weimerskirch v. Commissioner, supra, and Dellacroce v.
Commissioner, 83 T.C. 269 (1984), the Government possessed no
evidence linking the taxpayers to illegal income. In Dellacroce,
we held the notice of deficiency to be arbitrary because the
reconstruction of income did not link the taxpayer to the income-
generating activity.
In this case, by contrast, there is ample evidence,
including numerous concessions by petitioners, reflecting that
petitioners’ income was not fully reported. Respondent has shown
a clear and direct linkage to sources of unreported income in
this case. See Adamson v. Commissioner, 745 F.2d 541 (9th Cir.
1984), affg. T.C. Memo. 1982-371. Accordingly, we find that
respondent’s determination is not arbitrary.
Income Reconstruction--Where, as here, taxpayers have failed
to provide adequate records substantiating their income, an
indirect method may be used to reconstruct their income. Holland
v. United States, 348 U.S. 121 (1954). Petitioners bear the
burden of proving that the determinations made by respondent in
the notices of deficiency are erroneous. Rule 142(a); Cracchiola
v. Commissioner, 643 F.2d 1383 (9th Cir. 1981) (citing Welch v.
Helvering, 290 U.S. 111 (1933)), affg. per curiam T.C. Memo.
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