- 9 - erroneous.6 Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). Unreported Income Section 6001 requires taxpayers to maintain sufficient records to determine their correct tax liabilities. Petitioner does not dispute that he did not maintain any books or records for 1986 relating to his income-producing activities. If a taxpayer fails to keep the required books and records, or if the books and records maintained do not clearly reflect income, respondent is authorized by section 446 to reconstruct income in accordance with a method that clearly reflects the full amount of income received, Petzoldt v. Commissioner, 92 T.C. 661 (1989), 6 Respondent raised for the first time in the answer, as an alternative position, that if the Court were to determine that petitioner is not liable for the additions to tax for fraud for the years at issue, petitioner would be liable for the additions to tax for negligence on the entire underpayment for each of those years, and not, as determined in the notice, only on the portion of the underpayment attributable to certain determina- tions in that notice that are discussed below. Rule 142(a). As indicated supra note 2, respondent conceded at trial the addi- tions to tax for fraud for 1986 and the deficiency in, and additions to, tax for 1987. Respondent generally would have the burden of proof on her alternative position in the answer with respect to the additions to tax for negligence for 1986. In arguing the additions to tax for negligence on brief, respondent does not make clear to the Court whether or not she is advancing her alternative position that petitioner is liable for the additions to tax for 1986 on the entire underpayment for that year. In this connection, however, respondent's counsel advised the Court in her opening statement before trial that, after respondent's concession of the additions to tax for fraud, no issues remain in this case on which respondent has the burden of proof. Given the state of the record, we conclude that respon- dent has abandoned her alternative position in the answer with respect to the additions to tax for negligence for 1986.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
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