                        T.C. Memo. 2000-43



                      UNITED STATES TAX COURT



               STUART M. SMITH, JR., Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 3183-99.                     Filed February 9, 2000.



     Stuart M. Smith, Jr., pro se.

     Alvin A. Ohm, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     FOLEY, Judge:   By notices dated December 9, 1998, respondent

determined the following deficiencies and additions to tax

relating to petitioner's Federal income taxes:
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Year          Deficiency          Sec. 6651(a)          Sec. 6654
1992            $3,011                $742                  $129
1993             3,807                    952                159
1994             5,783               1,446                   298
1995             5,496               1,359                   296
1996             5,817               1,453                   309

All section references are to the Internal Revenue Code in effect

for the years in issue, and all Rule references are to the Tax

Court Rules of Practice and Procedure.

       After concessions, the remaining issues for decision are

whether petitioner is liable for:     (1) Income and self-employment

taxes relating to reconstructed self-employment income and (2)

additions to tax.

                            FINDINGS OF FACT

       Petitioner resided in Dallas, Texas, at the time his

petition was filed.      During the years in issue, petitioner worked

in both permanent and temporary positions for various businesses.

Petitioner received $25,968, $21,103, $7,398, $10,936, and $5,529

of wages, interest income, and unemployment compensation relating

to 1992, 1993, 1994, 1995, and 1996, respectively.     Petitioner

did not file tax returns for any of the years in issue.

       On July 24, 1996, petitioner submitted a Pre-Employment

Questionnaire (questionnaire) to Jakes’ Temps.     On the

questionnaire, petitioner listed several previous employers.

Petitioner stated that he worked for Pro Staff during 1995 and
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for Perrier Group of America during 1995 and 1996.   At the time

he made his determinations, respondent had no record (i.e., no

Forms W-2 or 1099) of petitioner’s working for either of these

businesses.

     Petitioner failed to provide respondent with any information

relating to his income.   Respondent, using 1992 as the base year,

reconstructed petitioner’s gross income relating to 1993 through

1996 by applying the Consumer Price Index (CPI) method to 1993

through 1996 and subtracting income reported on Forms W-2 and

1099.   On December 9, 1998, respondent mailed petitioner notices

of deficiency in which respondent determined that petitioner:

(1) Received self-employment income of $5,524, $19,986, $17,165,

and $23,329 relating to 1993, 1994, 1995, and 1996, respectively;

and (2) was liable for income tax and, pursuant to section 1401,

self-employment tax.

                              OPINION

I.   Reconstructed Self-Employment Income

     Generally, a notice of deficiency is presumed correct, and

the taxpayer bears the burden of proving that the determination

is erroneous.   See Welch v. Helvering, 290 U.S. 111, 115 (1933).

The Court of Appeals for the Fifth Circuit, where an appeal would

lie, has recognized, however, that “a court need not give effect

to the presumption of correctness in a case involving unreported

income if the Commissioner cannot present some predicate evidence
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supporting its determination.”    Portillo v. Commissioner, 932

F.2d 1128, 1133 (5th Cir.), affg. in part and revg. and remanding

in part T.C. Memo. 1990-68.   If the presumption of correctness

does not apply, respondent’s determination will be deemed

arbitrary, and he will bear the burden of proving it correct.

See Sealy Power, Ltd. v. Commissioner, 46 F.3d 382, 386 (5th Cir.

1995), affg. in part and revg. and remanding in part T.C. Memo.

1992-168.   Thus, respondent must establish that he had predicate

evidence for his determinations that petitioner received self-

employment income relating to 1993 through 1996.1

     Respondent has established that he had predicate evidence

(i.e., the questionnaire) for his determinations that petitioner

received self-employment income in 1995 and 1996.    The

presumption of correctness is applicable, and petitioner failed

to present sufficient evidence establishing that these

determinations are erroneous.    Accordingly, we sustain

respondent’s determinations relating to petitioner’s income and

self-employment tax deficiencies relating to 1995 and 1996.

     Respondent failed, however, to establish that he had

predicate evidence for his determinations that petitioner


     1
        Respondent, citing Parker v. Commissioner, 117 F.3d 785
(5th Cir. 1997), contends that he does not have to establish
predicate evidence for these determinations. We disagree. The
holding in Parker applies only to Commissioner’s determinations
relating to income reported by third-party payors. See id. at
787 (holding that respondent has no duty to investigate third-
party payment reports that are not disputed by the taxpayer).
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received self-employment income in 1993 and 1994.       See, e.g.,

Senter v. Commissioner, T.C. Memo. 1995-311 (concluding that

respondent failed to provide predicate evidence to support her

deficiency determinations based on CPI calculations).      Therefore,

respondent has the burden of coming forward with evidence to

establish the existence and amount of any deficiency.      See

Jackson v. Commissioner, 73 T.C. 394, 401 (1979).       Respondent

failed to present any evidence relating to these determinations.

Accordingly, we do not sustain respondent’s determinations

relating to petitioner’s income and self-employment tax

deficiencies relating to 1993 and 1994.

II.   Additions to Tax

      Respondent determined that petitioner is liable, pursuant to

sections 6651(a) and 6654, for additions to tax for failure to

file timely Federal income tax returns and to make estimated tax

payments, respectively, relating to the years in issue.

Petitioner failed to present any evidence relating to these

issues.   Accordingly, we sustain respondent’s determinations.

      Contentions we have not addressed are irrelevant or

meritless.

      To reflect the foregoing,

                                          Decision will be entered

                                      under Rule 155.
