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OPINION
According to petitioners, the determinations made in
respondent’s notices of deficiency are arbitrary and erroneous
and therefore are not entitled to the normal presumption of
correctness provided in our Rules and by the caselaw. See Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). Where a
taxpayer establishes that a deficiency determination is
arbitrary, capricious, or without reasonable foundation, the
normal presumption of correctness attached thereto may not be
applicable. Helvering v. Taylor, 293 U.S. 507 (1935); Dellacroce
v. Commissioner, 83 T.C. 269, 287 (1984); Riland v. Commissioner,
79 T.C. 185, 201 (1982); Jackson v. Commissioner, 73 T.C. 394,
401 (1979).
Petitioners maintain that petitioner did not realize any
income during the years in issue from the marijuana transactions
identified by respondent’s agent. Throughout the proceedings and
in their briefs, petitioners argue that petitioner was acting as
a mere conduit or agent for the other co-conspirators and that
petitioner did not have ownership in the funds or profits
relating to the marijuana transactions. Further, petitioners
claim that respondent has failed to produce any predicate
evidence to establish that petitioner received income from
illegal drug sales.
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