Durkee v. Commissioner
In Durkee v. Commissioner, 6 Cir., 162 F.2d 184, 187, 173 A.L.R. 553 (1947), where the Commissioner had made an arbitrary determination, and thereafter contended that the burden was upon the taxpayer to prove that a certain recovery for damages in the settlement of a law suit was not taxable, or to prove the proper allocation between what was taxable income and nontaxable income, Judge Miller, speaking for the court in overruling such contention, said that:
"where it is apparent from the record that the Commissioner's determination is arbitrary and excessive, the taxpayer is not required to establish the correct amount that lawfully might be charged against him, and he is not required to pay a tax that he obviously does not owe. In proceedings before the Tax Court, as distinguished from suits for refund in the District Court, it is sufficient to show that the Commissioner's determination is invalid. Upon such a showing the case should be remanded to the Tax Court for further hearings on the point involved."