Tommy Ho Ching Cheng - Page 13

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          deficiency determination is normally entitled to a presumption of           
          correctness.  Rapp v. Commissioner, 774 F.2d 932, 935 (9th Cir.             
          1985); Delaney v. Commissioner, 743 F.2d 670, 671 (9th Cir.                 
          1984), affg. T.C. Memo. 1982-666; Weimerskirch v. Commissioner,             
          596 F.2d 358, 360 (9th Cir. 1979), revg. 67 T.C. 672 (1977); see            
          Rule 142(a); see also Welch v. Helvering, 290 U.S. 111, 115                 
          (1933).  However, in an unreported income case this presumption             
          arises only when it is supported by some substantive evidence               
          that the taxpayer received unreported income.  Rapp v.                      
          Commissioner, supra; Delaney v. Commissioner, supra; Weimerskirch           
          v. Commissioner, supra; see also United States v. Janis, 428 U.S.           
          433, 441-442 (1976).  Once the Commissioner has carried his                 
          initial burden of introducing some evidence linking the taxpayer            
          with the income-producing activity, the burden shifts to the                
          taxpayer to rebut the presumption by establishing by a                      
          preponderance of the evidence that the deficiency determination             
          is arbitrary or erroneous.  Rapp v. Commissioner, supra; Adamson            
          v. Commissioner, 745 F.2d 541, 671 (9th Cir. 1984), affg. T.C.              
          Memo. 1982-371; see Rule 142(a).                                            
               In his answer, respondent states:                                      
                    [6](c) In this plea agreement, petitioner admitted                
               he had gross income during the calendar year 1996 of at                
               least $645,253.00.                                                     
                              *    *    *    *    *    *    *                         
                    [6](e) During 1996 the petitioner was in the trade                
               or business of obtaining passports and visas.                          





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