- 8 - methods was appropriate, respondent’s determinations were not arbitrary or excessive, and petitioners bear the burden of going forward. See Merritt v. Commissioner, 301 F.2d 484, 486 (5th Cir. 1962), affg. T.C. Memo. 1959-172; Schroeder v. Commissioner, 40 T.C. 30, 33 (1963). Respondent concedes that, pursuant to Rule 142(a), he bears the burden of proof on matters relating to the increases in the deficiencies pleaded in his amendment to answer. With respect to all of the remaining matters, our conclusion is unaffected by who bears the burden of proof.3 Accordingly, we need not address the parties’ burden of proof contentions. II. Respondent’s Income Determinations Respondent contends that David failed to report income he received from Demetree and Associates and property he had transferred to family members and friends. Petitioners contend that the amounts they received were gifts and loans and that David’s transfers of properties were bona fide transactions. A. Demetree and Associates Respondent contends that all of the income earned by Demetree and Associates should have been attributed to David because he, and not Arthur, controlled the business. Respondent asserts that: David performed the managing and leasing activities relating to Demetree and Associates; Arthur was never 3 Sec. 7491 is inapplicable because the examination of petitioners’ returns began before the statute’s effective date.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
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