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1987, 1988, 1989, and 1992 in his hearing request and in his
correspondence hearing, and (3) petitioner’s underlying
liabilities for 1987, 1988, 1989, and 1992 are properly before
the Court. On the basis of the aforementioned concessions, we
shall review petitioner’s underlying tax liabilities for 1987,
1988, 1989, and 1992. See Goza v. Commissioner, supra. Where
the underlying tax liability is properly at issue, we review that
issue de novo. Sego v. Commissioner, supra at 610; Goza v.
Commissioner, supra at 181. We review the remainder of the
Commissioner’s determination for an abuse of discretion. Sego v.
Commissioner, supra.
A. Underlying Liabilities
1. Deficiencies and Additions to Tax Excluding Civil Fraud
The Commissioner's determinations generally are presumed
correct, and the taxpayer bears the burden of proving that those
determinations are erroneous.2 Rule 142(a); Welch v. Helvering,
2 Sec. 7491 is inapplicable to this case. See Warbelow’s
Air Ventures, Inc. v. Commissioner, 118 T.C. 579, 582 n.8 (2002)
(sec. 7491 is effective for court proceedings arising in
connection with examinations commencing after July 22, 1998).
The U.S. Court of Appeals for the Ninth Circuit, to which an
appeal of this case would lie, has held that in order for the
presumption of correctness to attach to a notice of deficiency in
unreported income deficiency cases, the Commissioner must come
forward with substantive evidence establishing some “evidentiary
foundation” linking the taxpayer with the income-producing
activity, Weimerskirch v. Commissioner, 596 F.2d 358, 361-362
(9th Cir. 1979), revg. 67 T.C. 672 (1977), or “demonstrating that
the taxpayer received the unreported income”, Edwards v.
(continued...)
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