Eddie Lee Williams - Page 7

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               As a general rule, the taxpayer bears the burden of proving            
          the Commissioner’s determinations to be in error.  Rule 142(a).3            
          Certain courts have recognized a limited exception to the general           
          rule where the notice of deficiency determines that the taxpayer            
          failed to report income, particularly income derived from illegal           
          activities.  Llorente v. Commissioner, 649 F.2d 152, 156 (2d Cir.           
          1981), affg. in part and revg. in part 74 T.C. 260 (1980);                  
          Weimerskirch v. Commissioner, 596 F.2d 358 (9th Cir. 1979), revg.           
          67 T.C. 672 (1977).  In such circumstances, the Commissioner must           
          come forward with evidence establishing a minimal foundation,               
          which may consist of evidence linking the taxpayer with an                  
          income-producing activity.  Petzoldt v. Commissioner, supra at              
               Because respondent has shown that petitioner was convicted             
          of the illegal distribution of cocaine, and that petitioner                 
          received and spent proceeds from the sale thereof, respondent has           
          linked petitioner to the relevant income-producing activity.                
          Respondent provided this Court with summary documents evidencing            
          the various cash deposits and expenditures underlying his                   
          determination of the amounts of unreported income.  These                   
          summaries generally were produced by respondent during the                  
          criminal investigation and prosecution of petitioner.  Although             

          3  Sec. 7491, which shifts the burden of production and/or                  
          proof under certain circumstances, does not apply in the present            
          case because the underlying examination commenced prior to July             
          22, 1998.  Internal Revenue Service Restructuring & Reform Act of           
          1998, Pub. L. 105-206, sec. 3001(c), 112 Stat. 727.                         

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