The only exception to the general rule concerning the burden of proof is when the taxpayer shows the IRS's deficiency determination is arbitrary and excessive; if the taxpayer meets that burden, the IRS must prove the precise deficiency. Doyal v. Comm'r, 616 F.2d 1191, 1192 (10th Cir. 1980). While Ellis has claimed the IRS's procedural rule violations should have shifted the burden of proof from him to the IRS, he has not claimed the burden of proof shifted because the IRS's deficiency determinations were arbitrary and excessive.
Ronald next claims the IRS calculation of assessments was arbitrary and erroneous. Once the IRS shows an evidentiary foundation for the assessment, as it has done here, the taxpayer may overcome the presumption of correctness that attaches to it by citing proof that the assessment is arbitrary and erroneous. See United States v. Gosnell, 961 F.2d 1518, 1520 (10th Cir. 1992); Jones v. C.I.R., 903 F.2d 1301, 1304 (10th Cir. 1990) (citing United States v. Janis, 428 U.S. 433, 442 (1976)); Doyal v. Comm'r, 616 F.2d 1191, 1192 (10th Cir. 1980) (the only exception to the general rule concerning the burden of proof is when the taxpayer shows the IRS's deficiency determination is arbitrary and excessive). Among other things, Ronald claims the IRS arbitrarily assessed self-employment taxes on royalty income, failed to deduct the cost basis of property in determining capital gain, improperly imposed penalties for failing to pay estimated taxes, improperly failed to apply a carry-forward loss from a prior return, and improperly assessed short-term instead of long-term capital gain rates.
The principle articulated in Greenberg's Express--that the Court will not generally look behind a notice of deficiency--has been repeatedly upheld by courts, including the U.S. Court of Appeals for the Ninth Circuit. See Pasternak v. Commissioner, 990 F.2d 893, 898 (6th Cir. 1993), aff'g T.C. Memo. 1991-181; Ogiony v. Commissioner, 617 F.2d 14, 16-17 (2d Cir. 1980), aff'g and remanding T.C. Memo. 1979-32; Doyal v. Commissioner, 616 F.2d 1191, 1192 n.3 (10th Cir. 1980), aff'g T.C. Memo. 1978-307; Crowther v. Commissioner, 269 F.2d 292, 293 (9th Cir. 1959), aff'g on this issue 28 T.C. 1293 (1957). Respondent acknowledges that we have considered the administrative handling of a case when there is substantial evidence of unconstitutional conduct by respondent.
Generally, a taxpayer has the burden to prove both the entitlement to a deduction and the proper amount. Doyal v. Comm'r of Internal Revenue, 616 F.2d 1191, 1192 (10th Cir. 1980); Washington Mutual, Inc. v. United States, 130 Fed.Cl. 653, 686-87 (2017).