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OPINION
Respondent based his determination of a deficiency in
petitioner's 1988 Federal income tax entirely on five disputed
insurance checks. After adjustments, the deficiencies for 1989,
1990, and 1991 are net amounts representing (1) one-third of the
gross receipts from the remainder of the 162 disputed insurance
checks, (2) respondent's reversal of petitioner's yearend ledger
adjustments, which petitioner claims identify amounts in his
client trust account which were not taxable receipts, and (3)
insurance settlement checks deposited into the Mitsui client
trust account in 1991 and a $3,000 cash deposit into that same
account in 1989.
Unreported Income
Respondent, on the basis of the 162 cashed checks made out
to petitioner's law firm, determined that petitioner had
unreported income for each of the years in issue.
The Commissioner's determinations are entitled to a
presumption of correctness. Rule 142(a); Welch v. Helvering, 290
U.S. 111 (1933). The burden is upon the taxpayer to demonstrate
in the first instance that the Commissioner's determination is
arbitrary and unreasonable in order to deprive it of the
presumption of correctness. Harbin v. Commissioner, 40 T.C. 373,
376 (1963).
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