- 19 -19
should have been included in AJF's gross income. Therefore,
since respondent has shown that petitioners had unreported
income, the burden of proving the existence of cash payments to
casual labor lies with Ferrentino.
Relying on Perez v. Commissioner, supra; Richardson v.
Commissioner, 264 F.2d 400 (4th Cir. 1959), affg. in part, revg.
in part T.C. Memo. 1958-59, and H.J. Feinberg & Co., Inc. v.
Commissioner, a Memorandum Opinion of this Court dated Sept. 20,
1950, Ferrentino argues that respondent should be required to
present affirmative evidence disputing Ferrentino's claim of
"casual labor" expenditures. In these cases, the courts
recognized that understatements of gross receipts did not
establish that a taxpayer had fraudulently intended to evade tax
where the taxpayer also showed that he had offsetting deductions
relating to such receipts that he failed to claim on his return.
Zack v. Commissioner, T.C. Memo. 1981-700, affd. 692 F.2d 28 (6th
Cir. 1982).
The taxpayers in Perez, Richardson, and H.J. Feinberg & Co.,
Inc. submitted positive proof that unreported deductible payments
were in fact made and were related to their respective unreported
receipts. Zack v. Commissioner, supra. Based on such proof, the
courts shifted the burden of going forward to the Commissioner to
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