- 27 -
preponderance of the evidence that respondent’s determination is
excessive; i.e., erroneous, and/or arbitrary; i.e., “without
rational foundation”. Helvering v. Taylor, 293 U.S. 507, 514-515
(1935); see also Pittman v. Commissioner, 100 F.3d 1308, 1317
(7th Cir. 1996), affg. T.C. Memo. 1995-243; Page v. Commissioner,
58 F.3d 1342, 1347-1348 (8th Cir. 1995), affg. T.C. Memo. 1993-
398. If petitioners fail to satisfy their initial burden of
production, the burden of production does not shift to
respondent, petitioners do not satisfy their burden of
persuasion, and we must uphold respondent’s determination.
Helvering v. Taylor, supra at 514-515; Berkery v. Commissioner,
91 T.C. 179, 186 (1988), affd. without published opinion 872 F.2d
411 (3d Cir. 1989).
Petitioners attempted to satisfy their initial burden of
production and their ultimate burden of persuasion by calling
only three witnesses--Zalman Melnik, Moshe Melnik, and Lawrence
Pennoni. Zalman and Moshe Melnik are petitioners seeking to
convince us that the annuity transactions at issue in this case
should be respected for Federal income tax purposes. Mr. Pennoni
is the attorney who planned and implemented the transactions.
Petitioners did not call any witness to testify on behalf of MMI,
the firm that acquired HouTex, regarding the timing and substance
of the negotiations, nor did they call any witness to testify on
behalf of Bermuda Trust, the Rashi and Rambam Trusts, or Clend.
Page: Previous 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 NextLast modified: May 25, 2011