- 5 - On October 22, 2004, petitioners filed a second amended Federal income tax return (second amended return) for 2001. On the second amended return, petitioners reported a sales price of $15,000 from the sale of 12,000 Colorcom units on Schedule D with a basis of zero and a long-term capital gain of $15,000. This adjustment to Schedule D did not change petitioners’ tax liability as reported on the first amended return. OPINION I. Burden of Proof As a general rule, the notice of deficiency is entitled to a presumption of correctness, and the taxpayer bears the burden of proving the Commissioner’s deficiency determinations incorrect. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). Section 7491(a), however, provides that if a taxpayer introduces credible evidence and meets certain other prerequisites, the Commissioner shall bear the burden of proof with respect to factual issues relating to the liability of the taxpayer for a tax imposed under subtitle A or B of the Internal Revenue Code (Code). For the burden to shift, however, the taxpayer must comply with the substantiation and record-keeping requirements as provided in the Code and have cooperated with the Commissioner. See sec. 7491(a)(2). Although petitioner claimed that section 7491(a) applies, petitioner failed to introduce sufficient evidence to shift thePage: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011