- 27 -
based on unreported income. In determining the amounts stated in
the notices of deficiency, respondent took a protective position,
attributing the same income to more than one petitioner.
Generally, the notice of deficiency is afforded a
presumption of correctness, and the taxpayer has the burden of
proof as to the amounts of the deficiencies. Rule 142(a);
Anastasato v. Commissioner, 794 F.2d 884, 886-887 (3d Cir. 1986),
vacating and remanding T.C. Memo. 1985-101. The Court of Appeals
for the Third Circuit, to which an appeal of the instant cases
would lie,11 will not give effect to the presumption of
correctness without some predicate evidence connecting the
taxpayer to the charged activity. Id. at 887; Gerardo v.
Commissioner, 552 F.2d 549, 554 (3d Cir. 1977), affg. in part,
revg. in part, and remanding T.C. Memo. 1975-341; Berkery v.
Commissioner, 91 T.C. 179, 195 (1988), affd. without published
opinion 872 F.2d 411 (3d Cir. 1989). If the taxpayer rebuts the
presumption by showing the determination is arbitrary and
erroneous, the presumption disappears and the burden of going
forward shifts to the Commissioner, but the Court of Appeals for
the Third Circuit has held that the ultimate burden of proof or
persuasion remains with the taxpayer. Anastasato v.
Commissioner, supra; Sullivan v. United States, 618 F.2d 1001,
1008 (3d Cir. 1980). The Commissioner has the right to make
11 See Golsen v. Commissioner, 54 T.C. 742 (1970), affd. 445
F.2d 985 (10th Cir. 1971).
Page: Previous 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 NextLast modified: May 25, 2011