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relies, to be admitted to explain the basis of the
expert’s opinion.” * * *
Engebretsen, et al. v. Fairchild Aircraft Corp., 21 F.3d 721,
728-729 (6th Cir. 1994).
Accordingly, respondent’s objection is sustained in that such
documents are not received in evidence for the truth of their
contents. Such documents, however, may be considered for
purposes of understanding or explaining the basis for the
expert’s opinion.
D. Revenue Agent's and Economists’ Reports
Respondent objects to the admission of respondent’s in-house
economists’ reports and international examiner’s reports.
Respondent points out that these reports were prepared prior to
the issuance of the notices of deficiency and, further, that the
reports do not represent respondent’s final determination. In
the vast majority of cases, we would agree that reports and
opinions of respondent’s employees prior to the issuance of the
deficiency notice are irrelevant to the proceeding. In cases
involving respondent’s determinations under section 482, however,
taxpayers must establish that the Commissioner’s determinations
were arbitrary, capricious, or unreasonable. That burden has
often been described as more difficult or heavier (than a mere
preponderance of the evidence) to carry.
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