- 31 - C. Amounts of Deficiencies; Nonfraudulent Causes In parts II. A. and II. B. of this opinion, respondent had the burden of proving, by clear and convincing evidence, that there were underpayments of tax, some part of which was due to fraud; respondent carried this burden. In this part of the opinion, petitioners have the burden of proving, by a preponderance of the evidence, that the deficiencies12 are less than the amounts respondent determined in the notice of deficiency. See Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). Petitioners also have the burden of proving, by a preponderance of the evidence, that some part of the 1991 or 1992 underpayment is not due to fraud. See sec. 6663(b). In the absence of adequate records, respondent may employ reasonable methods of reconstructing petitioners’ taxable income in a manner which clearly reflects income. See sec. 446(b); Holland v. United States, 348 U.S. 121 (1954); Parks v. Commissioner, 94 T.C. at 658. Although the notice of deficiency does not so state, it is evident from the record herein that respondent’s notice of deficiency determinations of “Other Unreported Income” are based 12For purposes of the instant case, “deficiency” is the same as “underpayment”. Compare sec. 6211(a) with sec. 6664(a).Page: Previous 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Next
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