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a. Petitioner’s Tax Returns
Petitioner contends that his tax returns establish that his
bases for the equipment he sold in 1987-90 are as reported on
those returns.5 We disagree. Tax returns do not establish the
truth of facts reported in them. Lawinger v. Commissioner, 103
T.C. 428, 438 (1994); Wilkinson v. Commissioner, 71 T.C. 633, 639
(1979); Roberts v. Commissioner, 62 T.C. 834, 837 (1974).
Petitioner argues that, because respondent accepted the
bases he reported on those returns for some equipment, respondent
must also accept the bases he reported for all of the equipment.
We disagree. Respondent’s acceptance of some items reported on a
return does not bar respondent from challenging other items
reported on the return. Showell v. Commissioner, 23 T.C. 495,
499 (1954), remanded on other grounds 238 F.2d 148 (9th Cir.
1956); Estate of Marcus v. Commissioner, T.C. Memo. 1955-298.
b. Petitioner’s Lists
Respondent objected on hearsay grounds to the admission of
petitioner’s lists of equipment sold. Petitioner failed to show
5 At trial on January 5, 2004, petitioner testified:
* * * [His] tax returns as filed and sworn to
under oath * * * [are correct]. There’s been no
testimony in this courtroom to show that those tax
returns are incorrect. There’s only been unsupported
allegations and insinuations by respondent’s attorney,
but no sworn testimony that they’re incorrect. They
are correct, and they are sworn to. They have not been
rebutted.
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