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T.C. Memo. 1991-181; Greenberg’s Express, Inc. v. Commissioner,
62 T.C. 324, 327 (1974).
To overcome the presumption of correctness, the taxpayer
must produce “‘competent and relevant evidence from which it
could be found that he did not receive the income alleged in the
deficiency notice.’” Sharwell v. Commissioner, 419 F.2d 1057,
1060 (6th Cir. 1969) (quoting Foster v. Commissioner, 391 F.2d
727, 735 (4th Cir. 1968), affg. in part and revg. in part T.C.
Memo. 1965-246); see also Helvering v. Taylor, 293 U.S. 507, 515
(1935) (“Unquestionably the burden of proof is on the taxpayer to
show that the Commissioner’s determination is invalid.”);
Traficant v. Commissioner, supra at 263 (“the taxpayer bears the
burden of production and the burden of proof as to an error in
the notice [of deficiency]”); Estate of DeNiro v. Commissioner,
795 F.2d 582, 584 (6th Cir. 1986) (stating that the burden of
going forward may shift to the Commissioner once the taxpayer
presents “‘relevant credible evidence’” that the Commissioner’s
determinations are incorrect (quoting Demkowicz v. Commissioner,
551 F.2d 929, 931 (3d Cir. 1977))), revg. and remanding T.C.
Memo. 1985-128.
In certain limited circumstances, if the taxpayer proves by
a preponderance of the evidence that the Commissioner’s
deficiency determination is arbitrary and excessive, then the
presumption of correctness no longer applies. See, e.g., United
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