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is arbitrary because there was evidence of higher gross income in
Kersting (Consolidated Cases), yet the District Court adopted the
more conservative figures. He further argues that irregularities
exist in respondent's method of income reconstruction in Kersting
(Consolidated Cases). These arguments fail to refute the fact
that respondent has connected petitioner to the income-producing
activity and has amply demonstrated the determination of
unreported income is grounded in fact. Because the determination
in this case stands securely on a foundation of concrete
evidence, we hold that the presumption of correctness attaches to
respondent's determination and the burden of proof rests with
petitioner.
Gross Income
Respondent argues petitioner is collaterally estopped from
relitigating the issue of whether he had gross income during 1982
through 1988 in the amounts determined by the District Court in
Kersting (Consolidated Cases). Petitioner agrees the elements of
collateral estoppel are satisfied but argues the judgment in
Kersting (Consolidated Cases) has no preclusive collateral
estoppel effect because the judgment was obtained by fraud
allegedly perpetrated by the Government on the District Court.
We disagree.4
4 The Court previously denied respondent's motion for
(continued...)
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