Eryck C. Aston - Page 7

                                        - 7 -                                         
          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...)           





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  Next

Last modified: May 25, 2011