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We recognize the difficulty of proving a negative, that is,
the nonreceipt of income, and in cases involving allegations of
unreported illegal income, we may reject respondent’s deficiency
determinations if they constitute “naked assessments”; i.e., if
they are not supported by the evidence. See, e.g., Williams v.
Commissioner, 999 F.2d 760 (4th Cir. 1993), affg. T.C. Memo.
1992-153; Cozzi v. Commissioner, 88 T.C. 435, 444 (1987);
Dellacroce v. Commissioner, supra at 280.
The present case, however, does not involve a naked
assessment. In this case, there is substantial evidence linking
petitioner to income from the illegal sale of marijuana during
1985, 1986, and 1987. That evidence consists not only of
petitioner’s arrest and subsequent criminal convictions for
engaging in the illegal sale of marijuana, criminal forfeitures,
and the testimony of various co-conspirators, but also
petitioner’s own admission that he was involved in a conspiracy
to possess and to sell marijuana. In Franklin v. Commissioner,
T.C. Memo. 1993-184, we held that indictment, guilty plea, and
conviction are sufficient to support an inference linking a
taxpayer to illegal income-generating activity.
Respondent’s tax deficiency determinations herein against
petitioners are entitled to the usual presumption of correctness.
As a general rule, gross income includes “all income from
whatever source derived”. Sec. 61(a). This includes income
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