- 12 - needed “predicate evidence supporting * * * [his] determination.” Id. at 1133. The Court of Appeals concluded that the Commissioner could not simply rely on a Form 1099 in making his determination when the taxpayer contested the accuracy of the Form 1099. This case is distinguishable from Portillo. Respondent did not determine that petitioner had unreported income, nor did he arbitrarily attribute veracity to the statement of a third party when making his determination. Respondent used the Forms 5472 that petitioner filed with its amended income tax returns to determine that petitioner was liable for withholding taxes. Petitioner’s Forms 5472 reported interest paid to GXE, a Hong Kong corporation that did not appear to satisfy the residency requirements for favorable tax treatment under the China Agreement.11 Petitioner argues, however, that respondent was on notice because its Forms 5472 reported two loans, one of which was made by GITIC, a Chinese corporation that is exempt from U.S. income tax under the China Agreement. Petitioner alleges that it gave a copy of its September 8, 1998, letter containing a summary of interest paid during 1995 and 1996 on the GITIC and GXE loans to 11The parties do not dispute that Hong Kong was not a part of China during the years in issue. The Court takes judicial notice that Hong Kong was a crown colony of the United Kingdom until it became a Special Administrative Region of the People’s Republic of China on July 1, 1997. See Fed. R. Evid. 201.Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 NextLast modified: March 27, 2008