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Immediately thereafter, NACOLAH issued two checks totaling
$35,061.76, dated March 12 and 13, 2003, made payable to
petitioner for commissions earned. The checks were sent to
Investments’ business address and were deposited by Donlon into
an account maintained by Investments. Investments subsequently
paid the taxes on the commissions.
Petitioner filed a 2003 Form 1040, U.S. Individual Income
Tax Return, reporting wages of $7,194, unemployment compensation
of $7,610, taxable refunds of $401, and adjusted gross income of
$15,205. Respondent received from NACOLAH a Form 1099-MISC,
Miscellaneous Income, reporting that commissions of $35,061 were
paid to petitioner in 2003. On November 7, 2005, respondent
issued to petitioner a statutory notice of deficiency determining
that petitioner had unreported income of $35,061 in 2003.
Discussion
The Commissioner’s determinations are presumed correct, and
generally taxpayers bear the burden of proving otherwise. Rule
142(a)(1); Welch v. Helvering, 290 U.S. 111, 115 (1933).
Under section 6201(d), the burden of production may shift to
the Commissioner where an information return, such as a Form
1099, serves as the basis for the determination of a deficiency.
If a taxpayer asserts a reasonable dispute with respect to any
item of income reported on a third-party information return and
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