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1268, 1270 (9th Cir. 1982); Malfatti v. Commissioner, T.C. Memo.
2005-19. A deficiency determination which is not supported by
some evidentiary foundation is arbitrary and erroneous.
Weimerskirch v. Commissioner, supra at 362. Under such
circumstances, the Commissioner has the burden of coming forward
with evidence to establish the existence and amount of any
deficiency. Jackson v. Commissioner, 73 T.C. 394, 401 (1979).
Respondent incorrectly relies upon Hardy v. Commissioner,
181 F.3d 1002 (9th Cir. 1999), affg. T.C. Memo. 1997-97, for the
proposition that a revenue agent’s testimony, based upon a review
of a taxpayer’s administrative file, and a copy of the taxpayer’s
notice of deficiency, identifying the third-party payor, satisfy
the needed evidentiary foundation demonstrating that the taxpayer
received unreported income.
In Hardy v. Commissioner, supra at 1005, the Court of
Appeals for the Ninth Circuit found the Commissioner was relieved
from producing third-party income statements to prove a
taxpayer’s receipt of income because the taxpayer stipulated the
Commissioner received the statements. Therefore, the evidentiary
foundation requirement was satisfied when the Commissioner
introduced worksheets showing tax owed on the basis of third-
party information and bank statements, in combination with the
parties’ stipulating the Commissioner’s receipt of the
third-party information. Id.
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