- 12 -
Portillo v. Commissioner, supra, the Commissioner issued a notice
of deficiency based on a Form 1099 filed with the Commissioner.
The U.S. Court of Appeals for the Fifth Circuit held that the
notice of deficiency was arbitrary because the Commissioner
failed to show the requisite indicia that the taxpayer received
unreported income, and the Commissioner knew that the employer
who issued the Form 1099 to the taxpayer lacked records to
support the amounts contained in the Form 1099. Id. at 1131,
1133-1134. Portillo is distinguishable from the instant case
because here petitioner concedes that he received the �570,000
bank draft; respondent checked A.T.O.'s books and records, which
did not show that A.T.O. had received the settlement, and
petitioner was the last person to whom respondent could trace the
settlement funds.
We have considered the other cases that petitioner cites in
his motion, reply to respondent's objection, and statement under
Rule 50(c), including Sealy Power Ltd. v. Commissioner, supra,
(we may shift burden to Commissioner if notice of deficiency is
arbitrary); Powers v. Commissioner, 100 T.C. 457 (1993), affd. in
part, revd. in part and remanded in part 43 F.3d 172 (5th Cir.
1995) (litigation costs awarded to taxpayer); and Durkin v.
Commissioner, 87 T.C. 1329, 1402 (1986), affd. 872 F.2d 1271 (7th
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011