- 11 - $5,154,614 (rather than $800,000). The Schedule E loss comprised a loss of $2,518,616 form Alofs, a loss $2,893,326 from Target, and income of $257,328 from Excellence. The changes resulted in a $4,948,548 NOL for 1996, which was then carried back to 1993, 1994, and 1995. Respondent audited petitioners’ 1993 through 1996 tax returns, and the audit resulted in proposed adjustments to all 4 years. However, the proposed adjustments generated deficiencies only with respect to 1994 and 1995. The adjustments were based on the income figures reported on petitioners’ original, as opposed to amended, returns. The corrected tax liability as so adjusted was then compared to the tax liability shown on the amended returns to determine the deficiency and penalty amounts, if any, for 1993, 1994, and 1995. For 1996, the original Form 1040 and the pro forma Form 1040 reflected the same ultimate tax liability. Throughout the audit and in this litigation, petitioners have continued to assert a position with respect to a 1996 loss and attendant carrybacks consistent with that taken on their amended returns. OPINION I. Preliminary Matters--Burden of Proof As a general rule, the Commissioner’s determinations are presumed correct, and the taxpayer bears the burden of proving error therein. Rule 142(a); Welch v. Helvering, 290 U.S. 111,Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011