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income tax deficiency and fraud penalty to $118,365.75 and
$157,822, respectively, respondent sent petitioners a proposed
stipulation of facts and discovery requests. Petitioners did not
respond, and the proposed stipulation of facts was deemed
established under Rule 91(f). The Court granted respondent’s
motions to compel with respect to the discovery requests and
issued an Order limiting petitioners’ ability to put on evidence
with respect to matters sought by means of the discovery
requests.
Petitioners failed to appear at the October 15, 2001, Los
Angeles, California, trial session.
OPINION
While petitioners must show that respondent erred in
determining the income tax deficiency of $103,559, respondent
must prove the increased deficiency of $54,263.3 See Rule
142(a); Achiro v. Commissioner, 77 T.C. 881, 889-891 (1981); Beck
Chem. Equip. Corp. v. Commissioner, 27 T.C. 840, 856 (1957). We
find petitioners have not shown that respondent erred in his
initial determination, and respondent has proven that the
increased deficiency is correct.
At the onset, we note that respondent’s proposed stipulation
3 This amount is the excess of the $157,822 increased
deficiency over the $103,559 deficiency determined in the
statutory notice of deficiency.
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