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the proceeds into the KC account. As to $81,511.64 that was
deposited into the KC account during 1999 but was not received
from Yoo, Baek received that cash by cashing at a check cashing
establishment (establishment) a check payable on the KC account
to the establishment or to cash. Baek immediately deposited most
of the proceeds of those checks into the KC account so that other
checks from the KC account would be covered for payment.
OPINION
Respondent argues primarily that the $126,646.80 is taxable
to petitioners as compensation that Yoo paid to Baek during the
operation of KC’s export business. Respondent argues
alternatively that the $126,646.80 is taxable to petitioners
because they have failed to prove otherwise. Petitioners argue
primarily that the $126,646.80 is not taxable to them in that it
consists of (1) cash that Baek received from Yoo in repayment of
funds drawn by him from the KC account and (2) cash that Baek
received from his cashing of checks at the establishment.
Petitioners argue alternatively that respondent bears the burden
of proof and that he has failed to carry this burden.
We decide this case on the basis of the primary argument and
need not and do not decide the parties’ dispute as to who bears
the burden of proof. We note, however, that the Court of Appeals
for the Ninth Circuit, the court to which an appeal of this case
lies, has held repeatedly that respondent’s determination in a
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