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States v. Walton, 909 F.2d 915, 918 (6th Cir. 1990). The
taxpayer bears “the initial burden of producing credible evidence
that [he] did not earn the taxable income * * * or of presenting
an argument that the IRS deficiency calculations were not
grounded on a minimal evidentiary foundation.” Id. at 919.5
At trial and on brief, petitioner has not argued that he did
not receive compensation for his services during the years at
issue or did not receive early IRA distributions in 1995 and
1997. Construing petitioner’s argument to be that respondent’s
determination lacked a minimal evidentiary foundation and was
therefore arbitrary, we conclude that petitioner has not met his
initial “burden of production on the issue of arbitrariness.”
Id. at 922.
Petitioner testified only as respondent’s witness. His
testimony did not credibly support his case: while feigning
improbable memory lapses as to other income sources, petitioner
5 United States v. Walton, 909 F.2d 915 (6th Cir. 1990),
involved the Commissioner’s net-worth reconstruction of the
taxpayer’s alleged unreported income. The court held that
although the Government had failed to offer any evidentiary
foundation for a disputed element of the net-worth computation,
the taxpayer had nevertheless failed to meet his initial “burden
of production on the issue of arbitrariness.” Id. at 922.
Noting that the taxpayer had failed to elicit evidence as to how
the Commissioner had arrived at the disputed item or to bring
other relevant evidence to the trial court’s attention, the court
concluded that the taxpayer’s “vague denial * * * [of the
disputed item] was certainly not sufficient to meet [his] burden
of production on the issue of arbitrariness.” Id.
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