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3. Liability for Underlying Tax
Having decided that the July 1990 transfer was fraudulent,
we turn to the question of whether petitioner may nonetheless
reduce or avoid liability by proving that Mr. Espinosa does not
presently owe the amounts stated in the notice of transferee
liability. Petitioner bears the burden of establishing that
respondent’s determinations are erroneous. See Rule 142(a). On
this record, however, evidence offered by petitioner is
insufficient to overcome the presumption of correctness afforded
to respondent’s determinations, at least to the degree that would
be necessary to render her liable for less than the value of the
assets transferred.
The net deficiencies stated in the notice of transferee
liability generally parallel the balances shown on Mr. Espinosa’s
returns, with the major exception being that no credit was given
for the claimed $80,967 overpayment. The only evidence produced
by petitioner of any payments that could reduce Mr. Espinosa’s
tax liability was the statement of his account revealing that
$93,000 to $94,000 had been received by respondent. Petitioner
did not, however, provide a copy of the return Mr. Espinosa
claims to have filed for 1980 or any other evidence of his 1980
taxes. We consequently have no basis for concluding that the
payments were misapplied and should more properly be credited
against the stated net deficiencies for 1981, 1982, 1984, or
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