- 15 -15
Commissioner, 865 F.2d 342, 343 (D.C. Cir. 1989); Heminway v.
Commissioner, 44 T.C. 96, 101 (1965). However, where a
shareholder uses corporate property for his personal benefit, not
proximately related to corporate business, the shareholder must
include the value of the benefit in income as constructive
dividends to the extent of the corporation's earnings and
profits. DiZenzo v. Commissioner, 348 F.2d 122, 125 (2d Cir.
1965), revg. in part and remanding for additional findings to
support the Tax Court's holding, T.C. Memo. 1964-121, remanding
T.C. Memo. 1966-16; Truesdell v. Commissioner, 89 T.C. 1280, 1294
(1987); Falsetti v. Commissioner, 85 T.C. 332, 356 (1985).
Ferrentino argues that he used the check proceeds to pay for
"casual labor" needs of AJF during certain peak times or when
additional help was needed. Respondent counters that any
additional labor needs of AJF were satisfied by the use of leased
helpers from Manpower Services.
The burden of proof to establish the existence of cash
payments to casual labor is on petitioners. Once respondent
establishes the existence of unreported income and allows the
deductions claimed on the return, he does not have the further
burden of proving the negative that the taxpayer did not have any
additional deductions. See Perez v. Commissioner, T.C. Memo.
1974-211 (citations omitted). One Court of Appeals has stated
that "This rule is grounded on the realization that it would be
virtually impossible for the Government to show the negative fact
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