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counsel has already acknowledged this fact and, in any case, has
raised this issue untimely and in contravention of our pretrial
order dated August 14, 2000.
As to the acknowledgment, the following colloquy occurred
between the Court and the parties at the beginning of trial:
THE COURT: * * * let me just make sure that
the Court’s understanding that the burden of
proof in this case is on the Petitioner. Is
that a correct understanding?
MR. SCHIFFMAN: Yes, Your Honor.
THE COURT: Counsel?
MS. GILBERT: Yes, Your Honor.
It was only when petitioner filed its brief with the Court that
it argued for the first time that the burden of proof was on
respondent. Petitioner’s raising of this issue in its brief was
untimely, prejudicial to respondent, and in violation of the
referenced pretrial order. See Estate of Maggos v. Commissioner,
T.C. Memo. 2000-129.
Even if the issue as to the burden of proof was properly
before the Court, the notices of deficiency were neither
arbitrary nor excessive under the facts at hand, including,
especially, that petitioner failed during the audit to provide to
respondent adequate substantiation to support its return
position. In Mitchell v. Commissioner, 416 F.2d 101 (7th Cir.
1969), affg. T.C. Memo. 1968-137, for example, a taxpayer who
lacked adequate records argued that the burden of proof was on
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