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v. Commissioner, 596 F.2d 358, 361-362 (9th Cir. 1979), revg. 67
T.C. 672 (1977), and Edwards v. Commissioner, 680 F.2d 1268, 1270
(9th Cir. 1982)). The Commissioner need only provide a minimal
showing that the taxpayer failed to report income. See Palmer v.
IRS, 116 F.3d 1309, 1312-1313 (9th Cir. 1997). Once the
Commissioner provides the necessary evidentiary showing, the
taxpayer bears the burden of proving that the notice of
deficiency is arbitrary or erroneous. See Cohen v. Commissioner,
T.C. Memo. 2001-249.
Petitioner formerly worked for Farmers. Although his
employment ended in 1999, petitioner testified that an insurance
salesman can earn commissions in later years based on renewals of
policies sold in earlier years. At trial, petitioner appeared to
acknowledge that Farmers owed him such commissions. We conclude
that respondent has established the necessary evidentiary
foundation linking petitioner to the income-producing activity.
Petitioner therefore bears the burden of proving that the notice
of deficiency is erroneous. Id. To attempt to meet this burden,
petitioner argues the $15 is not includable in gross income
because Farmers used that amount to offset the debt he reputedly
owed the company.
Income is taxed to the taxpayer who earns it. Commissioner
v. Culbertson, 337 U.S. 733, 739-740 (1949); Sparkman v.
Commissioner, T.C. Memo. 2005-136. Lack of control over the
income earned does not justify its exclusion from gross income if
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