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proof or the other party has established a prima facie case. Id.
Petitioner has the burden of proof and has not made a prima facie
showing of the facts which it wishes to establish by adverse
inference. Petitioner knew the identity of the IRS economist in
ample time to call him as a witness but failed to do so. Under
these circumstances we shall not draw an adverse inference
against respondent.
Petitioner argues that Ms. Hamilton erroneously relied on
MANA surveys, which in petitioner's view did not involve
comparable companies or transactions. Although petitioner is not
in the manufacturing business, it performs a service similar to a
manufacturer's commissioned agent. Taking into account the
materials within respondent's possession at the time of making
the section 6038A(e)(3) determination, we are not persuaded that
respondent's reliance on the MANA survey was misplaced.
Petitioner argues that the "what if" scenario shows that Ms.
Hamilton backed into the 15-percent gross profit spread and that
her suggestion that a 10-percent spread would ensure a profit
shows that the determination was arbitrary. Ms. Hamilton did
calculate the minimum spread necessary for petitioner to show a
profit. The MANA Research Bulletin states:
Typically, an agent and a manufacturer will offer what
they feel is a fair rate for the work to be done when
they negotiate their contract. * * * But, in general,
fair is a figure whereby both parties can make money
and where both are pleased with the arrangement. * * *
* * * * * * *
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