Gloria J. Spurlock - Page 20

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          documents that respondent introduced through the affidavits                 
          provide ample evidentiary support for his determinations.                   
          Respondent has satisfied any burden of production which he may              
          initially bear under the cases cited above.                                 
               Petitioner also contends that respondent, in making his                
          determinations, arbitrarily relied on the Forms W-2 and 1099 that           
          the payors submitted without ascertaining whether those entities            
          submitted Forms W-3 and 1096, signed under penalties of perjury.            
          Petitioner also suggests that respondent’s determinations are               
          arbitrary in that he failed to ascertain whether the payors were            
          on his “Bad Payor List”.16  We disagree and hold that                       
          respondent’s determinations are not per se arbitrary where he               
          fails to ascertain whether the third-party payors submitted Forms           
          W-3 and 1096 with the information returns or whether those payors           
          are on his “Bad Payor List”.  In the instant case, there is no              
          evidence that any of the payors were on respondent’s “Bad Payor             

          785, 787 (5th Cir. 1997), affg. an unpublished order of this                
          Court.  Congress, in enacting sec. 6201(d), has also recognized             
          that in the absence of that Code section’s application, the                 
          burden of proving that determinations of unreported income are              
          arbitrary or incorrect generally remains on the taxpayer where              
          the Commissioner relies solely on information returns that third            
          parties submitted.                                                          
               16The Commissioner maintains a “Bad Payor List”, which                 
          includes those persons and entities that have previously                    
          submitted false, fraudulent, inaccurate, or mistaken information            
          to the Social Security Administration or the IRS on Forms W-2 or            

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