- 8 - proving that it is erroneous. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). Because of this presumption of correctness, courts will generally not look behind the notice of deficiency to examine the evidence upon which the determination was made. Dellacroce v. Commissioner, 83 T.C. 269, 280 (1984). The Court of Appeals for the Fifth Circuit, to which appeal of this case would lie, has noted, however, that "a court need not give effect to the presumption of correctness in a case involving unreported income if the Commissioner cannot present some predicate evidence supporting its determination." Portillo v. Commissioner, 932 F.2d 1128, 1133 (5th Cir. 1991), affg. in part and revg. and remanding in part T.C. Memo. 1990-68. If the presumption of correctness does not apply, the Commissioner's determination will be deemed arbitrary, and consequently, she will bear the burden of proving the correct amount of any taxes owed. Sealy Power, Ltd. v. Commissioner, 46 F.3d 382, 386 (5th Cir. 1995), affg. in part and revg. and remanding in part T.C. Memo. 1992-168. In her notice of deficiency, respondent determined that petitioner had embezzlement income. Based on her CPI calculations, she also determined that petitioner had unreported self-employment income from his tax consulting practice and other businesses. We now address the validity of these determinations.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
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