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deficiency included schedules that listed for each of the years at
issue the Commissioner’s position regarding the sources of the
deposits into the taxpayer’s accounts during each year and the
total amount of the deposits during each year from each source).
But we do not find respondent’s failure to do so in this case
constitutes the raising of new matter.
The purpose of section 7522 is to give the taxpayer notice of
the Commissioner’s basis for determining a deficiency. Shea v.
Commissioner, supra at 196. In the situation before us, Mr.
Mostoller represented petitioners during the examination of their
returns, as well as the examination of the Bitker partnership
returns, and he had a copy of the examination report related to the
partnership returns. The notices of deficiency, in conjunction
with the partnership examination report to which petitioners had
access through Mr. Mostoller, gave petitioners sufficient notice of
respondent’s basis for determining the deficiencies. Under these
circumstances, we are satisfied that the notices of deficiency
sufficiently described the basis of the deficiencies within the
meaning of section 7522.
B. Section 7491
1. Penalties
Under section 7491(c), the Commissioner has the burden of
production with respect to an individual’s liability for any
penalty. Respondent acknowledges having the burden of production
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