- 13 -
Commissioner, 53 T.C. 96, 106 (1969). However, upon clear proof
of unreported receipts, the burden of coming forward with
offsetting costs or expenses shifts to the taxpayer. Siravo v.
United States, 377 F.2d 469, 473-474 (1st Cir. 1967); Elwert v.
United States, 231 F.2d 928, 933 (9th Cir. 1956); United States
v. Bender, 218 F.2d 869, 871-872 (7th Cir. 1955); United States
v. Stayback, 212 F.2d 313, 317 (3d Cir. 1954). In addition,
section 280E disallows deductions and credits (but not costs of
goods sold) with respect to the sale of controlled substances.
See S. Rept. 97-494, at 309 (1982).
1. Receipts
The record contains substantial evidence to support the
existence of unreported receipts from marijuana sales.
Petitioner was convicted, under the criminal standard of proof
beyond a reasonable doubt, of conspiracy to possess and
distribute marijuana. Petitioner has admitted in various papers
filed with this Court that one of the witnesses at the criminal
trial testified that petitioner sold marijuana to her.
Petitioner was convicted under section 7206(1), beyond a
reasonable doubt, for failure to disclose that during the years
in issue he “engaged in the operation of a business activity from
which he derived gross receipts or sales and incurred
deductions”. Supra p. 3. The derivation of gross receipts was
thus an explicit part of the charge upon which petitioner was
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011