-40-
Petitioner further argues that, in some instances,
representations made by respondent's counsel to the Court
precluded petitioner from presenting evidence regarding certain
issues respondent raised on brief. We have reviewed those
instances. Most of those representations pertain to collateral
issues that we have found it unnecessary to address. Instead, we
have decided this case on the basis of the issues presented at
trial and fully briefed thereafter, including the comparative
liquidation test of section 1.704-1(b)(3)(iii), Income Tax Regs.,
the "facts and circumstances" test of section 704(b), and the
applicability of Vecchio.
The issues raised by the pleadings place upon the taxpayer the
burden of showing every necessary requirement to sustain its burden
of proof. Axelrod v. Commissioner, 56 T.C. 248, 255 (1971). In
the instant case, the FPAA, as well as the applicable sections of
the Internal Revenue Code and regulations, adequately set forth the
matters petitioner was required to demonstrate in order to carry
its burden of proof. Petitioner has failed to carry its burden of
showing that respondent's reallocation of partnership income to Mr.
Manchester was erroneous.
To reflect the foregoing and the parties' concessions,
Decision will be entered
under Rule 155.
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