- 7 -
been unfavorable to his position. See McKay v. Commissioner, 886
F.2d 1237, 1238 (9th Cir. 1989), affg. 89 T.C. 72 (1987); Wichita
Terminal Elevator Co. v. Commissioner, 6 T.C. 1158, 1165 (1946)
(“The rule is well-established that the failure of a party to
introduce evidence within his possession and which, if true,
would be favorable to him, gives rise to the presumption that if
produced it would be unfavorable.”), affd. 162 F.2d 513 (10th
Cir. 1947); see also Little v. Commissioner, T.C. Memo. 1996-270
(“The Wichita Terminal presumption generally applies where the
party failing to produce the evidence has the burden of proof.”).
Petitioner had the opportunity to call witnesses to testify, or
testify himself, on his behalf. However, petitioner did neither.
Petitioner also chose not to participate in the stipulation
process. The Court therefore sustains the deficiency determined
by respondent.
III. Additions to Tax
The Commissioner bears the burden of production in any court
proceeding with respect to an individual’s liability for
penalties or additions to tax. Sec. 7491(c). To meet this
burden, the Commissioner must come forward with sufficient
evidence indicating that it is appropriate to impose the relevant
penalty or addition to tax. Higbee v. Commissioner, 116 T.C.
438, 446 (2001). In instances where an exception to the penalty
or addition of tax is afforded upon a showing of reasonable
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