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Commissioner, 112 T.C. 183 (1999). In that case, the
Commissioner’s adjustment and explanation in the notice of
deficiency related to the total amount of business gross receipts
based on a bank deposit analysis. Subsequently, the taxpayer
contended that the reconstructed receipts were community income
and that only half of the amount determined was includable. The
Commissioner countered that section 66(b) authorized the
disallowance of community property benefits in certain
circumstances. The language of the notice had no reference to
community property interests or section 66(b). In Shea, we held:
that where a notice of deficiency fails to describe the
basis on which the Commissioner relies to support a
deficiency determination and that basis requires the
presentation of evidence that is different than that
which would be necessary to resolve the determinations
that were described in the notice of deficiency, the
Commissioner will bear the burden of proof regarding
the new basis. * * * [Emphasis added.]
Id. at 197. That holding was predicated on our understanding
that the purpose of section 7522 is to give taxpayers notice of
the basis for a deficiency determination. Id. at 196.
In these cases, respondent did provide petitioners with
explanations for all of the adjustments that made up the
deficiency. Unlike the taxpayer in Shea, petitioners are not
seeking to place the burden of proof on respondent. Instead,
petitioners contend that the expenses are not in issue, and,
therefore, they have no burden to show their entitlement to the
expenses. However, as already explained, respondent’s
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