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respondent’s calculation that petitioner earned $171,069 for his
services during 2000.
The business records also establish that petitioner received
an early IRA distribution in 2000. Respondent introduced both a
Form 1099 and the distribution form submitted by petitioner
requesting the distribution. The distribution form bears
signatures of petitioner and his wife, and the form is notarized.
The notarized form contains a request for a partial account
distribution of $50,000 and Federal income tax withholding of 20
percent of the distribution.
Based on the above, we conclude that respondent laid the
requisite foundation for the contested unreported income
adjustments and that respondent’s determinations are entitled to
the presumption of correctness.
B. Burden of Proof
Once the Commissioner has satisfied his initial burden of
production with respect to the unreported income adjustments, the
taxpayer ordinarily has the burden of proving by a preponderance
of the evidence that the adjustments are erroneous or arbitrary.
Blohm v. Commissioner, supra at 1549; Lundgren v. Commissioner,
T.C. Memo. 2006-177. However, the burden of proof may shift to
the Commissioner under section 7491(a) if the taxpayer has
produced credible evidence relating to the tax liability at issue
and has met his substantiation requirements, maintained required
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