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OPINION
Each petitioner3 bears the burden of showing error in the
determinations that remain at issue in the respective notices
issued to them.4 See Rule 142(a); Welch v. Helvering, 290 U.S.
3Although Ms. Dimon did not appear at trial, Mr. Dimon
informed the Court that Ms. Dimon had authorized him to speak for
both of them at trial, and the Court allowed him to do so.
4Respondent acknowledges that the examination of petition-
ers’ taxable year 1996 began after July 22, 1998. With respect
to court proceedings arising in connection with examinations
commencing after July 22, 1998, under sec. 7491(a) the burden of
proof shifts to respondent in specified circumstances. Internal
Revenue Service Restructuring and Reform Act of 1998 (RRA 1998),
Pub. L. 105-206, sec. 3001(c), 112 Stat. 727. As detailed in
respondent’s trial memorandum and in respondent’s oral and
written motions to dismiss for lack of prosecution made on Jan.
28, 2002, and filed on Jan. 30, 2002, respectively, petitioners,
inter alia, did not cooperate with reasonable requests made by
respondent for witnesses, information, documents, meetings, and
interviews, did not comply with the substantiation requirements
of the Code relating to the claimed Schedule C deductions at
issue, and did not introduce credible evidence at trial with
respect to the factual issues remaining in these cases that are
relevant to ascertaining their respective tax liabilities for
1996. See sec. 7491(a)(1) and (2). Consequently, according to
respondent, the burden of proof in these cases does not shift to
respondent under sec. 7491(a). Although Mr. Dimon ultimately did
appear at the recall of these cases on Jan. 30, 2002, and
although we did not grant respondent’s motions to dismiss these
cases for lack of prosecution, on the record before us, we agree
with respondent that petitioners bear the burden of proof in
these cases. See sec. 7491(a).
With respect to court proceedings arising in connection with
examinations commencing after July 22, 1998, under sec. 7491(c)
respondent bears the burden of production with respect to any
individual’s liability for any penalty or addition to tax. RRA
1998, sec. 3001(c). As discussed below, respondent concedes that
respondent has the burden of production with respect to the
additions to tax that respondent imposed on Ms. Dimon and Mr.
Dimon, respectively.
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Last modified: May 25, 2011