Larry J. and Sherilyn Wadsworth - Page 19

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          increases in deficiency, and affirmative defenses, pleaded in the           
          answer, it shall be upon the respondent.5                                   
               In Weimerskirch v. Commissioner, supra at 362, the U.S.                
          Court of Appeals for the Ninth Circuit (to which an appeal of               
          this matter would lie) held that the Commissioner’s determination           
          of a deficiency which allegedly resulted from unreported income             
          could not be upheld in absence of any substantive evidence                  
          linking the taxpayer to the alleged income-producing activity.              
               The rule in Weimerskirch does not apply to this case.  We              
          have consistently held that the taxpayer bears the burden of                
          proof with regard to claimed losses or deductions.  See Time Ins.           
          Co. v. Commissioner, 86 T.C. 298, 313-314 (1986); Chaum v.                  
          Commissioner, 69 T.C. 156, 163-164 (1977).  Even if the                     
          deficiencies at issue were assumed to stem from allegedly                   
          unreported income, this case would still not be analogous to                
          Weimerskirch.  In Weimerskirch, the Commissioner failed to                  
          introduce any evidence connecting the taxpayer with the activity            
          which allegedly produced the unreported income.  In the matter              
          before us, petitioners’ indivdual income tax returns and Gold               
          Coast’s partnership returns all reveal a relationship between               
          petitioners and the income-producing activity at issue.  We are             
          therefore not presented with a situation in which respondent                

               5  Petitioners do not allege, and we do not find, that sec.            
          7491(a) applies to this dispute.                                            

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