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deficiency on the grounds that it is arbitrary.4 Portillo v.
Commissioner, 932 F.2d 1128, 1133 (5th Cir. 1991), affg. in part,
revg. in part and remanding T.C. Memo. 1990-68; Schad v.
Commissioner, 87 T.C. 609, 618 (1986), affd. without published
opinion 827 F.2d 774 (11th Cir. 1987); Llorente v. Commissioner,
supra at 264; see also Senter v. Commissioner, T.C. Memo. 1995-
311.
Petitioner relies on Portillo as support for his position
that the notice of deficiency in the instant case is arbitrary
and therefore not entitled to the normal presumption of
correctness. The Court of Appeals for the Fifth Circuit,
however, has recently distinguished Portillo in Parker v.
Commissioner, 117 F.3d 785 (5th Cir. 1997). As in the instant
case, the taxpayers in Parker failed to file income tax returns
for the years in issue, yet relied upon Portillo for the
proposition that the usual presumption of correctness should not
apply because the Commissioner's determinations of unreported
income were based upon Forms 1099 and W-2. The Court of Appeals
for the Fifth Circuit stated:
In Portillo, the IRS issued a notice of deficiency when
it discovered that the taxpayer had reported
substantially less income from a particular payor than
4 "[T]he reason behind the burden-shifting principle in an
unreported income case is that the taxpayer bears the difficult
burden of proving the non-receipt of income." Sealy Power, Ltd.
v. Commissioner, 46 F.3d 382, 386 (5th Cir. 1995), affg. T.C.
Memo. 1992-168.
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