- 7 - orally moved to dismiss the case for failure to properly prosecute pursuant to Rule 123(b). The Court denied the motion. Counsel for petitioner, David M. Kirsch, explained to the Court why petitioner, upon Mr. Kirsch's advice, refused to respond to respondent's subpoena duces tecum despite the Court's denial of petitioner's motion to quash. Mr. Kirsch stated: I am profoundly uncertain that Mr. Wadsworth can say anything at all, even for example, I don't have any documents without waiving his privilege. I just don't know what the state of the law is there." The determinations of the Commissioner in her statutory notice of deficiency are presumed to be correct, and petitioner has the burden of proving otherwise. Rule 142(a); Welch v. Helvering, 290 U.S. 111 (1933). A taxpayer is required to maintain records that are sufficient to enable the Commissioner to determine his correct income tax liability. Sec. 6001; Meneguzzo v. Commissioner, 43 T.C. 824, 831-832 (1965); sec. 1.6001-1(a), Income Tax Regs. At trial, petitioner refused to proceed to carry his burden of proof, relying on his claimed rights under the Fifth Amendment. Some courts have recognized a limited exception to this general rule where the Commissioner alleges that the taxpayer has unreported income. In some cases, the deficiency determination must be supported by some evidentiary foundation linking the taxpayer to the alleged illegal income producing activity. SeePage: 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