Kaing Chin and Hae Kyung Baek - Page 5

                                        - 5 -                                         
          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              






Page:  Previous  1  2  3  4  5  6  7  Next

Last modified: May 25, 2011