Bennett v. Commissioner IRS ( 1998 )

USCA1 Opinion

                                [NOT FOR PUBLICATION]



                            UNITED STATES COURT OF APPEALS

                                FOR THE FIRST CIRCUIT





        No. 97-1778



                                 TERENCE M. BENNETT,



                                Petitioner, Appellant,



                                          v.



                          COMMISSIONER OF INTERNAL REVENUE,



                                Respondent, Appellee.




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                          ON APPEAL FROM THE DECISION OF THE



                               UNITED STATES TAX COURT



                     [Hon. Robert P. Ruwe, U.S. Tax Court Judge]
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                                        Before



                                Lynch, Circuit Judge,
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                        Coffin and Cyr, Senior Circuit Judges.
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             Peter D.  Anderson, with whom  Scott H. Harris and  McLane, Graf,
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        Raulerson & Middleton, P.A. were on brief for appellant.
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             Michelle  B.  O'Connor,  Attorney,  Tax Division,  Department  of
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        Justice, with whom Loretta C. Argrett, Assistant Attorney General, and
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        Gilbert  S. Rothenberg, Attorney, Tax Division, Department of Justice,
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        were on brief for appellee.






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FEBRUARY 25, 1998


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                    Per  Curiam.   Petitioner Terence M. Bennett challenges
Per  Curiam.
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          a United  States Tax Court  ruling rejecting his request  for the



          redetermination of a tax deficiency resulting from his receipt of



          the proceeds from the sale  of five antique automobiles.  Bennett
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          v. Commissioner, 73 T.C.M.  (CCH) 2389 (1997).  In the  Tax Court
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          Bennett   maintained  that  some  Saudi  friends  had  owned  the



          vehicles,  sold them, then loaned him the  proceeds.  See Webb v.
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          Commissioner, 15 F.3d 203, 205 (1st Cir. 1994) ( [B]ona fide loan
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          proceeds  are not gross income to the borrower. ).  On appeal, he



          maintains  that the  burden of  proving  a deficiency  assessment



          predicated   on   unreported   income   should  rest   with   the



          Commissioner, not the taxpayer.



                    Bennett concedes, however, as he must, that  the law in



          this circuit is to the  contrary, see Delaney v. Commissioner, 99
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          F.3d 20, 23  (1st Cir. 1996) (citing United States v. Rexach, 482
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          F.2d 10, 16  (1st Cir. 1973)), and  that other courts of  appeals



          permit  such burden-shifting only if the deficiency assessment is



          manifestly  arbitrary and  capricious or  devoid  of a  plausible



          factual predicate  for linking the  taxpayer to the  income, see,
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          e.g., Portillo v. Commissioner, 932 F.2d 1128, 1132-33  (5th Cir.
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          1991).  Accordingly, the contention urged on appeal devolves into



          a  claim that  the Tax  Court s meticulous  findings of  fact are



          clearly erroneous.  See  Crowley v. Commissioner, 962 F.2d  1077,
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          1080 (1st Cir. 1992).



                    In support, Bennett simply points  to inconclusive bits



          of evidence which might be considered indicia of a bona fide loan
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          transaction, at the same time  downplaying a mountain of evidence



            including his  own admissions   that he owned  the vehicles and
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          deliberately structured the  transaction to avoid taxes.   "Where



          there are two permissible views of the evidence, the factfinder's



          choice between them cannot be clearly erroneous."  Id.
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                    Affirmed, see Local Rule 27.1.   The parties shall bear
Affirmed, see Local Rule 27.1.   The parties shall bear
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          their own costs.  SO ORDERED.
their own costs.  SO ORDERED.
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