CANBY, Circuit Judge:
Gerald and Mary Rapp appeal a decision of the Tax Court granting the Commissioner's motion for summary judgment on the Rapps' petition for redetermination of tax deficiencies and additions to tax, and denying their motion to suppress notices of deficiency and certificates of assessment. We affirm.
A. Motion to Suppress
The IRS, pursuant to 26 U.S.C. § 7602, is authorized to examine records and issue summonses for the purpose of determining the tax liability of any individual. When an IRS summons is served on a "third-party record keeper," the taxpayer to whom the records named in the summons relate is entitled to notice of the summons, and may institute a proceeding to quash the summons or intervene in the enforcement proceeding. 26 U.S.C. §§ 7609(a) and (b). The Rapps contend that the Tax Court erred in denying their motion to suppress the notices of deficiency and Certificates of Assessments and Payments because the IRS failed to notify them of the issuance of two of the summonses. The contention is without merit.
Moreover, neither Alaska Helicopters nor Ocean Technology appears to fit within the narrow statutory definition of "third-party recordkeepers" set forth at 26 U.S.C. § 7609(a)(3)(A) through (G).
The Rapps next contend that the Tax Court erred in denying their motion to suppress because, although they were given notice of the summons issued to the First National Bank of Anchorage, they were not informed of the proceeding that the Commissioner instituted to enforce the summons. Title 26 U.S.C. §§ 7609(b)(1) and (2) provide that a party entitled to notice of a third-party summons has the right to institute a proceeding to quash the summons or intervene in the enforcement proceeding. Although their right to intervene could not be exercised if they were not notified of the proceeding, the Rapps have not alleged any concrete prejudice resulting from the failure to receive notice.
B. Summary Judgment
The Rapps contend that the Tax Court erred in granting summary judgment because
The Commissioner's deficiency determination is normally entitled to a presumption of correctness. Delaney v. Commissioner, 743 F.2d 670, 671 (9th Cir.1984); see also Adamson v. Commissioner, 745 F.2d 541, 547 (9th Cir.1984); United States v. Stonehill, 702 F.2d 1288, 1293 (9th Cir.1983), cert. denied, 465 U.S. 1079, 104 S.Ct. 1440, 79 L.Ed.2d 761 (1984). However, the presumption arises only where it is supported by some substantive evidence that the taxpayer received unreported income. Delaney, 743 F.2d at 671; Edwards v. Commissioner, 680 F.2d 1268, 1270 (9th Cir.1982); Weimerskirch v. Commissioner, 596 F.2d 358, 360 (9th Cir.1979). Once the Government has carried its initial burden of introducing some evidence linking the taxpayer with income-producing activity, the burden shifts to the taxpayer to rebut the presumption by establishing by a preponderance of the evidence that the deficiency determination is arbitrary or erroneous. Adamson, 745 F.2d at 547; Delaney, 743 F.2d at 671.
The record on appeal contains the deficiency notices, summonses to banks and other third parties, Forms 4089, 2210 and 1040 prepared by the IRS, and other documents showing the calculations upon which the IRS based the deficiencies. While these records reflect that the IRS had before it information linking the Rapps with income-producing activities, including employment, the sale of their residence, and involvement in a business, that underlying information does not itself appear in the record. The Rapps, however, did not attack the presumption of correctness of the Commissioner's determination on the ground that there was no linking of the Rapps with income-producing activity. Indeed, their petition alleges as one ground of error that the Commissioner failed to consider or allow for "legitimate and proper deductions." The connection between the Rapps and income-producing activity is sufficiently acknowledged to permit the presumption of correctness to attach to the Commissioner's determination. The Rapps' characterization of the assessments as "arbitrary" is not sufficient to overcome that presumption. See Parkinson v. Commissioner, 647 F.2d 875, 876 (9th Cir.1981).
The district court also correctly rejected the Rapps' argument that the three year statute of limitations imposed by 26 U.S.C. § 6501(a) bars the assessment of taxes. The deficiency assessments were not barred because the Rapps failed to file returns for the years for which the deficiencies were assessed. Where no returns have been filed, taxes may be assessed at any time. Edwards v. Commissioner, 680 F.2d at 1269; 26 U.S.C. § 6501(c)(3).
The Rapps' claim to deductions and exemptions raises no triable issue as to the correctness of the Commissioner's assessments. The taxpayer has the burden of proof to substantiate claimed deductions. Zmuda v. Commissioner, 731 F.2d 1417, 1421 (9th Cir.1984); cf. United States v. Zolla, 724 F.2d 808, 809-10 (9th Cir.), cert. denied, 469 U.S. 830, 105 S.Ct. 116, 83 L.Ed.2d 59 (1984) (Commissioner need not make any factual showing in support of a deficiency determination based on the disallowance of deductions). The determination that the taxpayer has failed to produce sufficient evidence to support a deduction is one of fact, subject to reversal only if clearly erroneous. Zmuda, 731 F.2d at 1421. Here, the Tax Court did not err in finding that the Rapps failed to establish their entitlement to deductions and exemptions.
Nor did the Tax Court err in sustaining the Commissioner's assessment of penalties and additions to tax under 26 U.S.C. §§ 6651(a), 6653(a) and 6654. The IRS' assessment of a negligence penalty under section 6653 is presumed to be correct. Delaney, 743 F.2d at 672. The taxpayer has the burden of showing that the assessment is erroneous. Zmuda, 731 F.2d at 1422; Hall v. Commissioner, 729 F.2d 632, 635 (9th Cir.1984). The Rapps presented no evidence that their failure to file or report their income was due to anything other than negligence or disregard of the tax laws.
Finally, the addition to tax provided by section 6654(a) was correctly assessed because the Rapps failed to establish that they fit within any of the exceptions listed in that section. See Grosshandler v. C.I.R., 75 T.C. 1 (1980).
C. Due Process
The Rapps contend that they were denied due process because the IRS and the Tax Court refused to address their constitutional arguments, and because the Tax Court did not review the process by which the Commissioner assessed the deficiency. The contention is meritless.
In the interest of resolving the Rapps' case prior to a court hearing, the IRS inquired whether the Rapps would be interested in attending an appeals conference in order to present documentary evidence in opposition to the asserted deficiency. The IRS stated that settlement of the case would be unlikely if the Rapps intended to present only constitutional, religious, moral, or political objections to the assessed deficiency. In response, the Rapps requested the IRS to answer a series of frivolous questions. See Albertson v. Subversive Activities Control Board, 382 U.S. 70, 79, 86 S.Ct. 194, 199, 15 L.Ed.2d 165 (1965); Edwards v. Commissioner, 680 F.2d at 1270. The failure to address these questions did not deny the Rapps due process.
Nor were the Rapps denied due process by the Tax Court. They had a full opportunity to present their case, and submitted a memorandum in opposition to summary judgment and a motion to suppress. The Tax Court addressed whatever meritorious issues they raised. Accordingly, the judgment of the Tax Court is AFFIRMED.