Walton A. Sutherland - Page 14

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          petitioner concedes that the burden of proof normally rests with            
          the taxpayer.  See Rule 142(a).  Petitioner argues, however:                
               This presumption of correctness does not apply and the                 
               burden of proof shifts to respondent where there is a                  
               showing by a petitioner that the determination of the                  
               deficiency set forth in the notice of deficiency was                   
               arbitrarily made.                                                      
          With respect to respondent's notice of deficiency for 1987,                 
          petitioner claims:  "Respondent lost petitioner's 1987 tax return           
          and calculated the 1987 notice of deficiency arbitrarily without            
          knowledge of the actual income reported or taxes paid by                    
          petitioner in 1987."                                                        
               Petitioner claims that respondent's notice of deficiency is            
          arbitrary and therefore should not be afforded the usual                    
          presumption of correctness.  In addressing that contention, we              
          note that the courts generally will not look behind the                     
          Commissioner's determination, even if it is based on hearsay or             
          other evidence inadmissible at trial.  Anastasato v.                        
          Commissioner, 794 F.2d 884, 886-887 (3d Cir. 1986), vacating T.C.           
          Memo. 1985-101; Dellacroce v. Commissioner, 83 T.C. 269, 280                
          (1984); Suarez v. Commissioner, 58 T.C. 792, 813 (1972).                    
          However, where the notice of deficiency is shown to be arbitrary,           
          that is sufficient to find for the taxpayer unless respondent               
          adequately cures such arbitrariness.  Helvering v. Taylor, 293              
          U.S. 507 (1935).  Consequently, under the Rule in Golsen v.                 
          Commissioner, 54 T.C. 742 (1970), affd. 445 F.2d 985 (10th Cir.             
          1971), in cases appealable to the Court of Appeals for the Third            




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