Wesley W. and Patsie Burnett - Page 12




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          from Lubbock.  As to the newspaper income, petitioners argue,               
          respondent failed to prove:  (1) That the newspaper was an                  
          income-producing activity that was engaged in by petitioners and            
          (2) that petitioners actually received income from the newspaper.           
               On the basis of the facts at hand, we agree with respondent            
          that petitioners are liable for Federal income tax on the amount            
          of reconstructed income.  As to the burden of proof, the Supreme            
          Court has held that a notice of deficiency “has the support of a            
          presumption of correctness, and the petitioner has the burden of            
          proving it to be wrong.”  Welch v. Helvering, 290 U.S. 111, 115             
          (1933); see also United States v. Janis, 428 U.S. 433, 441                  
          (1976); Helvering v. Taylor, 293 U.S. 507, 515 (1935).  This                
          presumption “is not evidence itself and disappears upon the                 
          introduction of evidence to overcome it.”  Pizzarello v. United             
          States, 408 F.2d 579, 583 (2d Cir. 1969); see Compton v. United             
          States, 334 F.2d 212, 216 (4th Cir. 1964); Ky. Trust Co. v.                 
          Glenn, 217 F.2d 462, 465 (6th Cir. 1954).  “If the taxpayer                 
          rebuts the presumption by showing that it is arbitrary and                  
          erroneous, the presumption disappears.”  Anastasato v.                      
          Commissioner, 794 F.2d 884, 887 (3d Cir. 1986), vacating and                
          remanding T.C. Memo. 1985-101; see Helvering v. Taylor, supra at            
          515.  Whereas the Courts of Appeals may vary on the effect upon             
          the burden of proof when the presumption does disappear, United             
          States v. Janis, supra at 441, the law of the Fifth Circuit, the            






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