- 39 -
Commissioner, supra; Zalewski v. Commissioner, T.C. Memo. 1988-
340; Delgado v. Commissioner, T.C. Memo. 1988-66; see Price v.
United States, 335 F.2d at 677 (“It is the burden of the taxpayer
to demonstrate a non-taxable source for this cash.”). Here,
petitioner failed to provide any proof that Alviso and GMT did
not have sufficient E&P to determine the distributions as
taxable, constructive dividends. Likewise, petitioner offered no
evidence of his adjusted bases.48
Accordingly, we find that petitioner has untimely raised the
E&P and basis issues and, otherwise, has failed to meet his
burden.49
4. Respondent’s Deficiency Determinations Are Not Erroneous
48In United States v. Miller, 545 F.2d 1204, 1215 (9th Cir.
1976), the court explained:
In holding that the constructive distribution
should not automatically be applied, it is not
herein asserted that diverted funds could never be
a return of capital. However, to constitute the
latter, there must be some demonstration on the
part of the taxpayer and/or the corporation that
such distributions were intended to be such a
return. To hold otherwise would be to permit the
taxpayer to divert such funds and if not caught,
to later pay out another return of capital; or if
caught, to avoid the conviction by raising the
defense that the sums were a return of capital and
hence non-taxable.
49Additionally, petitioner failed to demonstrate that the
distributions from his wholly owned corporations and employers
were not additional remuneration for the management services he
provided. The record reflects that Alviso and GMT each paid
petitioner a salary during the years at issue.
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