- 18 -18
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
that a taxpayer had no unreported deductions or exclusions."
United States v. Bender, 218 F.2d 869, 871 (7th Cir. 1955).
Respondent is entitled to rely on the
presumption that the deductions and exclusions listed
by a taxpayer in his return are all that exist. This
presumption is based upon reasonable experience * * *
and has the effect of shifting the burden of going
forward with the evidence to the * * * [taxpayer], when
the Government has shown unreported income. [United
States v. Lennon, 246 F.2d 24, 27 (2d Cir. 1957)
(quoting United States v. Bender, supra at 871-872).]
In this case, Ferrentino has admitted, by filing amended
returns for the years in issue, that he had unreported income.
AJF has conceded that it should have reported the amounts earned
from delivery services for Custom Decorating. Furthermore,
respondent has shown that the fuel reimbursement check amounts
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