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Connected With the Conduct of a Trade or Business in the U.S." or
in section II of that form entitled "Income Effectively Connected
With the Conduct of a Trade or Business in the U.S.". In both
its 1989 Form 1120F and its 1990 amended Form 1120F, petitioner
reported all of its items of income and expense in section II of
Form 1120F and none of those items in section I of that form.
In the notice of deficiency (notice) issued to petitioner,
respondent made adjustments with respect to certain of the items
of income and expense that petitioner reported in section II of
its 1989 Form 1120F and its 1990 amended Form 1120F. Respondent
also determined in the notice that petitioner is liable for the
accuracy-related penalty under section 6662(a) for each year at
issue because of negligence or disregard of rules or regulations
under section 6662(b)(1).
Petitioner bears the burden of proving that the
determinations in the notice are erroneous. See Rule 142(a);
Welch v. Helvering, 290 U.S. 111, 115 (1933). That this case was
submitted fully stipulated does not change that burden or the
effect of a failure of proof. See Rule 122(b); Borchers v.
Commissioner, 95 T.C. 82, 91 (1990), affd. 943 F.2d 22 (8th Cir.
1991).
In its brief, petitioner argues that it did not have income
for the years at issue which was effectively connected with the
conduct of a trade or business in the United States. It also
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