Tommy Ho Ching Cheng - Page 14

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                    [6](m) Petitioner admitted in his plea agreement                  
               that in 1996 he had income from his trade or business                  
               of obtaining U.S. passports and of obtaining Republic                  
               of the Marshall Island passports for various                           
               individuals.                                                           
                    [6](n) Petitioner had income in 1996 from his                     
               trade or business of obtaining legitimate U.S.                         
               passports for residence outside of the United States,                  
               including residence of the Marshall Islands.                           
          In his reply to answer, petitioner states:                                  
                    6(a) through (c), inclusive.  Admits.                             
                              *    *    *    *    *    *    *                         
                    6(e).  Admits.                                                    
                              *    *    *    *    *    *    *                         
                    6(m).  Admits.                                                    
                    6(n).  Admits.                                                    
          Petitioner’s admissions are sufficient for respondent to carry              
          his initial burden of connecting petitioner with the income-                
          producing activity.  Thus, the burden is on petitioner to show              
          that respondent’s deficiency determination is arbitrary or                  
          erroneous.  See Rule 142(a).                                                
               Petitioner’s argument focused exclusively on respondent’s              
          alleged inability to connect petitioner with the income-producing           
          activity.  Petitioner did not produce any evidence that would               
          indicate respondent’s determinations were incorrect.  Petitioner            
          has failed to meet his burden of proof.  Therefore, we sustain              
          respondent’s determination that petitioner had unreported income            





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