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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.
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