Harold Wapnick - Page 9




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          We disagree.  There is no evidence that anyone fabricated the               
          computer records.                                                           
               Petitioner cites Scar v. Commissioner, 814 F.2d 1363 (9th              
          Cir. 1987), revg. 81 T.C. 855 (1983), and Abrams v. Commissioner,           
          814 F.2d 1356 (9th Cir. 1987), affg. 84 T.C. 1308 (1985), for the           
          proposition that the determination in this case is invalid.                 
          We disagree.  The notice of determination was deemed invalid by             
          the Court of Appeals in Scar because it was clear from the notice           
          of deficiency itself that the Commissioner had determined a                 
          deficiency based on a partnership in which the taxpayers owned no           
          interest.  Scar v. Commissioner, supra at 1370.  Here,                      
          respondent’s determination was properly based on petitioner’s               
          activities and records.  We lacked jurisdiction in Abrams because           
          the taxpayers filed petitions in the Tax Court based on a letter            
          that was not a notice of deficiency.  Unlike Abrams, there was a            
          notice of deficiency in this case.  Thus, neither Scar nor Abrams           
          applies here.                                                               
               Petitioner contends that respondent’s determination is not             
          presumed to be correct because respondent used information to               
          reconstruct his income which would have been inadmissible under             
          the Federal Rules of Evidence if offered as evidence at trial.              
          We disagree.  First, respondent used admissible evidence to                 
          reconstruct petitioner’s income.  See par. B-2, below.  Second,             
          the Commissioner may determine a deficiency based “on hearsay or            






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