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Generally, the notice of deficiency is presumed to be
correct, and petitioner has the burden of showing otherwise.
Rule 142(a); Welch v. Helvering, 290 U.S. 111 (1933). However,
where respondent has asserted an increased deficiency, she has
the burden of proof on that increase. Rule 142(a). The effect
of respondent's amended answer, thus, is that respondent has the
burden of showing that the fair market rental value of the
property was less than that allowed in the notice of deficiency,
while petitioner must show it was greater. See supra notes 1, 3.
Petitioner argues that Barker's valuation is so close to the
figures in the notice of deficiency that his expert report should
be excluded from evidence on the basis that it is immaterial.
Petitioner hopes that the Court, after excluding this report,
will accept Berry's testimony as proof that the rents of $15,600
and $14,979 were reasonable. Berry did not testify about the
rental deductions, and petitioner offered no proof as to the fair
market rental value of its property.
This Court is "the trier of the facts, the judge of the
credibility of witnesses and of the weight of the evidence, and
the drawer of appropriate inferences." Hamm v. Commissioner, 325
7(...continued)
served a copy of her expert's report on petitioner well in
advance of the trial, and respondent's trial memorandum made
reference to the possibility of filing just such a motion. Katz
v. Commissioner, T.C. Memo. 1989-191; see Estate of Horvath v.
Commissioner, 59 T.C. 551, 555 (1973). Under these
circumstances, it was appropriate for the Court to grant
respondent leave to amend her answer.
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