- 12 - Williams obtained from Panalpina listed other vendors. Petitioner contends that Williams’ failure to obtain information from other vendors about how much petitioner paid them in the years in issue means that the determination of costs of goods sold was arbitrary. We disagree. Williams’ analysis is a reasonable basis for the notice of deficiency. Thus, the notice of deficiency is presumed to be correct, and petitioner bears the burden of proving that the deficiencies were less than determined by respondent.4 Welch v. Commissioner, 204 F.3d 1228, 1230 (9th Cir. 2000), affg. T.C. Memo. 1998-121; Calhoun v. United States, 591 F.2d 1243, 1245 (9th Cir. 1978); Clayton v. Commissioner, 102 T.C. 632, 645 (1994); DiLeo v. Commissioner, 96 T.C. 858, 869 (1991), affd. on other grounds 959 F.2d 16 (2d Cir. 1992); Parks v. Commissioner, 94 T.C. 654, 660 (1990). That burden of proof is important because petitioner lacked important business records. Conversely, there are gaps in Williams’ analysis which are important to issues where respondent has the burden of proof; i.e., whether petitioner is liable for fraud, and whether the deficiencies are larger than respondent determined. 4 Sec. 7491(a) does not apply because the examination for each year in issue commenced before July 23, 1998.Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
Last modified: May 25, 2011