- 8 -
Commissioner may support his determination on the basis of any
admissible evidence and need not rely on the evidence used in
making the administrative determination. See Jackson v.
Commissioner, 73 T.C. 394, 400 (1979). This conclusion is a
natural consequence of the well-established principle that “a
trial before the Tax Court is a proceeding de novo; our
determination of a petitioner’s tax liability must be based on
the merits of the case and not any previous record developed at
the administrative level.” Id. (citing Greenberg’s Express, Inc.
v. Commissioner, 62 T.C. 324, 328 (1974)); see also Gatlin v.
Commissioner, 754 F.2d 921, 923 (11th Cir. 1985), affg. T.C.
Memo. 1982-489. An exception to this rule against looking
behind the notice of deficiency may apply in the rare case where
the Commissioner introduces no substantive evidence but simply
rests on the presumption of correctness regarding his
determination that a taxpayer has unreported income. See Jackson
v. Commissioner, supra at 401. As discussed below, this is not
such a case.
9(...continued)
398; Day v. Commissioner, 975 F.2d 534, 537 (8th Cir. 1992)
(“Courts have occasionally declined to accord a presumption of
correctness to a deficiency notice when the Commissioner fails to
introduce any substantive evidence linking the taxpayer to the
income generating activity in question.” (Emphasis added.)),
affg. in part, revg. in part on other grounds and remanding T.C.
Memo. 1991-140.
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