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amount he received from the FTB was income. Petitioner did not,
however, seek advice from any tax professionals with respect to
these conclusions.
Respondent issued a notice of deficiency to petitioner on
March 16, 2005. Respondent adjusted petitioner’s income to
include the $337,122.53 received from the FTB and determined a
deficiency of $109,215. Respondent also asserted an addition to
tax under section 6651(a)(1) of $27,303.75, as well as an
addition to tax under section 6654(a) of $4,364.63.
OPINION
I. Unreported Income
The Commissioner’s determinations of deficiencies in tax
generally are presumed correct, and the taxpayer bears the burden
of proving that those determinations are erroneous. Rule 142(a);
Welch v. Helvering, 290 U.S. 111, 115 (1933); Durando v. United
States, 70 F.3d 548, 550 (9th Cir. 1995). The U.S. Court of
Appeals for the Ninth Circuit, to which an appeal of this case
would lie, has held that in order for the presumption of
correctness to attach to the notice of deficiency in unreported
income cases, the Commissioner must establish some evidentiary
foundation “demonstrating that the taxpayer received unreported
income.” Edwards v. Commissioner, 680 F.2d 1268, 1270 (9th Cir.
1982). Once there is some evidence, as there is here, that the
taxpayer received unreported income, the burden shifts to the
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