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contrary, to the Court of Appeals for the Ninth Circuit.
Consequently, we are bound to apply the law of the circuit as
summarized above. Golsen v. Commissioner, 54 T.C. 742 (1970),
affd. 445 F.2d 985 (10th Cir. 1971).
The evidence on which respondent relies to satisfy his
initial burden of production regarding his determination that
petitioner had unreported compensation income from RRS is drawn
primarily from letters dated October 22, 2001, and April 25, 2002,
that petitioner sent to Agent Leahy during the examination of
petitioner’s 1998, 1999, and 2000 returns. In those letters,
petitioner stated his donations to RRS consisted of equipment and
labor and that 90 percent of the “money” he gave RRS was his
expenditures to purchase the equipment. Respondent asserted in
his pretrial memorandum that based on these statements by
petitioner, Agent Leahy determined:
the 10 percent in excess of the value of the ‘donated’
property was for services rendered. The portion of the
income attributable to donations of services rendered to
[RRS] * * * by petitioner in 1999 (ten percent of
$15,320 plus the amount of contributions allegedly made
in 1999 and carried over to 2000, i.e. $8,794) was
determined to be $2,492.
Respondent also relies upon the following deemed admissions:
1. Petitioner provided personal services to RRS in 1999.
2. Petitioner received compensation for personal services
provided to RRS in 1999.
3. Petitioner did not include in gross income in 1999 the
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