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National Bank due to "the absence of adequate records". It is not
clear what information respondent possessed at the time the notice
was issued. However, it is evident that such information was
limited to information obtained from third party sources and
witness statements (particularly those of petitioner's former
husband John Williams and Mr. Kazanjian). Moreover, petitioner had
yet to provide any information to respondent to corroborate the
information given by others.
Furthermore, petitioner has not proven that the information
possessed by respondent at the time the notice was issued would
satisfy the hypothetical reasonable person that the bank deposits
came from nontaxable sources. Although, as petitioner contends,
respondent may have known about petitioner's divorce and the
subsequent nontaxable property settlement and child care payments,
there is no evidence that respondent had successfully matched the
bank deposits with those sources. Additionally, there were many
deposits that required explanation, and a determination of the
amount of income (if any) petitioner received from rendering
interior decorating services had to be made.
To be sure, it is not unreasonable for the Commissioner to
require a taxpayer to corroborate his or her claims regarding
dispositive and unresolved facts. Baker v. Commissioner, 83 T.C.
822, 830 (1984), vacated and remanded on another issue 787 F.2d 637
(D.C. Cir. 1986). The Commissioner is not required to concede a
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