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1. Income Reported on Information Returns
The Commissioner may properly reconstruct a taxpayer's
income from third-party payers’ reports, such as Forms 1099-
MISC.4 See Parker v. Commissioner, 117 F.3d 785 (5th Cir. 1997);
Andrews v. Commissioner, T.C. Memo. 1998-316; White v.
Commissioner, T.C. Memo. 1997-459. In this case we conclude that
petitioner received the amounts of income reported to respondent
in the Forms 1099-MISC as payments to California Barbecue for the
years in issue. The evidence suggests that this income
represents amounts paid for large-volume food catering services
provided by petitioner. Petitioner, however, did not provide any
information about California Barbecue or its operations, income
or expenses to respondent or the Court. Thus, while petitioner
4 Although neither party has raised the issue, we note that
sec. 6201(d), as amended by the Taxpayer Bill of Rights 2, Pub.
L. 104-168, sec. 602(a), 110 Stat. 1452, 1463 (1996), was
effective as of July 30, 1996. Sec. 6201(d) provides that if the
taxpayer, in a court proceeding, asserts a reasonable dispute
with respect to the income reported on an information return, and
fully cooperates with the Commissioner, then the Commissioner
shall have the burden of producing reasonable and probative
information in addition to the information return.
Even if petitioner had advanced that argument, we would
conclude he had not asserted a reasonable dispute with respect to
any item of income reported on an information return. He did not
file a Federal income tax return, nor did he offer testimony
indicating that he did not receive those items of income reported
on the Forms 1099-MISC. Nor, for that matter, did he deny
receiving the amounts deposited in the Great Western Bank.
Additionally, sec. 6201(d) would not be applicable because
petitioner offered no evidence that he fully cooperated with
respondent. To the contrary, the record amply demonstrates his
failure to cooperate, including his failure to provide access to
documents within his control. We hold that petitioner retained
the burden of proof as to the taxability of the income revealed
in the Forms 1099-MISC. Cf. Parker v. Commissioner, 117 F.3d 785
(5th Cir. 1997).
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Last modified: May 25, 2011