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B. Minimal Evidentiary Foundation
The Court of Appeals has not specified generally what
constitutes the required minimal evidentiary foundation.
Apparently, however, unless the taxpayer challenges the
Commissioner’s determination of a deficiency in tax on the
merits, the Commissioner need not provide any such foundation.
See Roat v. Commissioner, 847 F.2d 1379, 1383 (9th Cir. 1988)
(sustaining order of Tax Court dismissing taxpayers’ case for
failure to prosecute).
In Rapp v. Commissioner, 774 F.2d 932 (9th Cir. 1985), which
appears to involve unreported income from employment, the sale of
a residence, and a business, the only evidence the Commissioner
introduced consisted of documents the Commissioner had himself
2(...continued)
727, and which is effective with respect to examinations
commenced after July 22, 1998 (and which is, therefore, of no
application to this case). In general, and if certain
prerequisites are satisfied, then, with respect to any factual
issue relevant to ascertaining the liability of a taxpayer for
any tax, the burden of proof with respect to that issue is on the
Government, but only if the taxpayer introduces credible evidence
with respect to that issue. Sec. 7491(a)(1).
The Court of Appeals has not explained its reason for
burdening the Commissioner with the obligation to show his basis
for charging the taxpayer with unreported income. It cannot be
that a taxpayer is without resources, through discovery or
otherwise, to determine that the Commissioner had no such basis
(if, indeed, he did not). Presumably, a determination of
deficiency without basis in fact is invalid. In Helvering v.
Taylor, supra at 514, the Supreme Court said that it was
“unquestionably” the burden of the taxpayer to show such
invalidity.
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