- 16 - result in annual promotional income of $52,656 from the R.J. Reynolds contract ($13,164 x 4). Adding this annualized figure to petitioner’s reported promotional income of $16,736 and conceded postage income of $523 results in a total of $69,915, the amount of respondent’s determination. Petitioner contends: (1) He made input errors; (2) respondent did not produce a 1997 Form 1099 from R.J. Reynolds to petitioner; and (3) respondent failed to receive evidence from R.J. Reynolds to prove that the payments were made under the promotional contract. Respondent, however, does not bear the burden of showing that the determination is correct. Petitioner has the burden of establishing that the determination is erroneous. Rule 142(a); Welch v. Helvering, 290 U.S. at 115. This is another instance where petitioner’s failure to maintain records is the root of the problem. We cannot allow petitioner to hide behind his own contrivance in this setting. Accordingly, we hold that petitioner failed to report promotional income of $53,179. III. Bulk Sales Income Respondent determined that $25,425 in third party checks used by petitioner to purchase cashier’s checks were from Nick’s Liquors bulk sales customers. Because the checks had not been accounted for in petitioner’s records, respondent determined $25,425 in bulk sales was not included in income for 1997.Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
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