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to petitioner by Heath & Associates. At one point during cross-
examination, Ms. Wong admitted she had no documentary evidence to
support her statements.
Finally, respondent informed the court he was unable to
obtain the third-party records from Heath & Associates because
the company had ceased to exist. Thus, any evidence concerning
moneys paid by Heath & Associates to petitioner was based solely
upon the notice of deficiency and the memory and credibility of
Ms. Wong.
OPINION
Petitioner asserts she is not liable for the deficiency and
the additions to tax respondent determined because: (1)
Respondent failed to meet the burden of producing evidence that
petitioner earned unreported income of $15,800 in 1996; (2)
respondent failed to meet the burden of producing evidence that
petitioner is liable for additions to tax.
The Court of Appeals for the Ninth Circuit has determined
that in order for the presumption of correctness to attach to the
deficiency determination in unreported income cases, the
Commissioner must establish “some evidentiary foundation”
connecting the taxpayer with the income-producing activity,
Weimerskirch v. Commissioner, 596 F.2d 358, 361-362 (9th Cir.
1979), revg. 67 T.C. 672 (1977), or demonstrate the taxpayer
received unreported income, Edwards v. Commissioner, 680 F.2d
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