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Sec. 7491(a). Petitioners do not contend that section 7491
applies. Thus, petitioners bear the burden of proving that the
determinations in the notice of deficiency are in error. Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).
Before relying on this presumption to establish that the
taxpayer has unreported income, the Commissioner must introduce
evidence linking the taxpayer to an income-producing activity.
Blohm v. Commissioner, 994 F.2d 1542, 1549 (11th Cir. 1993),
affg. T.C. Memo. 1991-636; Weimerskirch v. Commissioner, 596 F.2d
358, 361-362 (9th Cir. 1979), revg. 67 T.C. 672 (1977).
Petitioners contend that respondent did not do so. We disagree.
It is undisputed that petitioners engaged in several income-
producing activities. Thus, the deficiency determination is
presumed to be correct, and petitioners have the burden of
proving it is incorrect. See Blohm v. Commissioner, supra.
Petitioners further contend that respondent failed to
thoroughly review their books and records. We disagree. Nothing
in the record suggests respondent did not properly consider the
records petitioners provided.
b. Whether Respondent Correctly Determined That
Petitioners Received Taxable Layaway Payments in
the Amount of $39,469 in 1995
Respondent determined that petitioners received, but failed
to report, $39,469 of income from layaway sales in 1995.
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