- 20 -
“whipsaw” notices designed to protect respondent’s ability to
proceed, if a purported “trust” should be recognized as a
separate taxable entity. In the circumstances of the case at
hand, the notice sent to petitioner was proper.
For this and the other reasons set forth above, we hold that
the notice sent to petitioner was valid and that we have
jurisdiction of the case at hand. Petitioner’s argument to the
contrary has no merit.
B. Presumption of Correctness
In general, a deficiency notice is presumed correct, and the
taxpayer has the burden of proving it wrong. See Rule 142(a);
Welch v. Helvering, 290 U.S. 111 (1933).7 There are certain
exceptions to this rule, however, where the notice alleges that
the taxpayer has received unreported income.
The Court of Appeals for the Ninth Circuit has held in
unreported income cases that the presumption of correctness
applies only where the Commissioner’s determination is supported
by some substantive evidence that the taxpayer received the
unreported income. See Rapp v. Commissioner, 774 F.2d 932, 935
(9th Cir. 1985); Weimerskirch v. Commissioner, 596 F.2d 358, 360-
361 (9th Cir. 1979), revg. 67 T.C. 672 (1977); Petzoldt v.
Commissioner, 92 T.C. 661, 687-690 (1989) (discussing Court of
7 We do not find that the burden-shifting provisions of
current sec. 6201(d) or sec. 7491 apply.
Page: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 NextLast modified: May 25, 2011