- 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 factPage: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Next
Last modified: May 25, 2011