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received $20,000 is based on Cortez's counting of his own two
bundles.
In this case of illegal unreported income, respondent must
establish that the deficiency determination is supported by a
proper foundation of substantive evidence. Weimerskirch v.
Commissioner, 596 F.2d 358, 362 (9th Cir. 1979), revg. 67 T.C.
672 (1977). Respondent cannot rely on the presumption of
correctness of the notice of deficiency and must offer evidence
linking the taxpayer to the activity. Id. Cortez's testimony
links petitioner to the thefts during 1986, and those thefts
provide the likely source for the unreported income that we
determine below. See Adamson v. Commissioner, 745 F.2d 541, 547
(9th Cir. 1984), affg. T.C. Memo. 1982-371.
Petitioners argue that Cortez's testimony is not reliable
because Cortez is required to testify for the Government under
the terms of his plea bargain. Petitioners also point to
Cortez's admissions at trial of his falsifying numerous police
reports and perjuring himself during prior court appearances.
Nonetheless, Cortez's testimony is not improbable, and it is
corroborated by the evidence of petitioners' cash deposits and
expenditures. In 1986, petitioners made unexplained cash
deposits totaling $23,150 and cash expenditures totaling
$22,631.80.
Petitioners claim that they had a cash hoard that was the
source for cash deposits and expenditures during 1986. They
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