- 15 -
establishing that the determination is arbitrary and erroneous.
See Helvering v. Taylor, 293 U.S. 507, 515 (1935). Several
Courts of Appeals recognize an exception to this general rule
where the Commissioner determines that the taxpayer received
income that was not reported on the taxpayer's return. In these
instances, the Commissioner must first present "'some predicate
evidence connecting the taxpayer to the charged activity.'"
Anastasato v. Commissioner, 794 F.2d 884, 887 (3d Cir. 1986)
(quoting Gerardo v. Commissioner, 552 F.2d 549, 554 (3d Cir.
1977)), vacating and remanding T.C. Memo. 1985-101.11
In any event, respondent's notice of deficiency here is
entitled to the traditional presumption of correctness. See Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). Respondent
has clearly produced sufficient "predicate evidence" linking
petitioner to the sale proceeds in this case. See Anastasato v.
Commissioner, supra at 887. Respondent produced evidence that:
(1) Petitioner had possession and control over the five
automobiles in issue from the date of acquisition until their
sale to Mr. Harley in July 1988; (2) petitioner provided Mr.
Harley with bills of sale listing himself as the owner of the
11The Court of Appeals for the First Circuit (to which this
case is appealable) has held that "in a deficiency or refund
suit, the burdens of going forward and of ultimate persuasion are
always on the taxpayer and never shift to the Commissioner."
United States v. Rexach, 482 F.2d 10, 17 (1st Cir. 1973); see
also Delaney v. Commissioner, 99 F.3d 20, 23 (1st Cir. 1996),
affg. T.C. Memo. 1995-378.
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