-17-
Respondent argues that her administrative and judicial
position regarding petitioner's 1990 discharge of indebtedness was
substantially justified. Petitioners disagree.
With regard to the administrative proceeding, the revenue
agent encountered several significant factual inconsistencies.
Petitioners bore the burden of establishing that the section
108(a)(1)(B) or (e)(5) exception applied. Rule 142(a); Welch v.
Helvering, 290 U.S. 111 (1933). Because it was unclear whether
petitioner was insolvent at the time the debt was canceled, it was
impossible to determine whether section 108(a)(1)(B) applied.
Neither were there sufficient facts to establish that section
108(e)(5) applied. If petitioner was solvent, there was no
evidence that the reduced debt was the debt "of a purchaser of
property to the seller of such property". Sec. 108(e)(5).
In effect, petitioners acted as if the burden of establishing
the facts of the case were on respondent. It is not unreasonable
for the Commissioner to require a taxpayer to corroborate its
claims regarding a dispositive and unresolved fact. Baker v.
Commissioner, 83 T.C. 822, 830 (1984), vacated and remanded on
another issue 787 F.2d 637 (D.C. Cir. 1986); Fallin v.
Commissioner, T.C. Memo. 1993-332; Caparaso v. Commissioner, T.C.
Memo. 1993-255. The Commissioner was not required to concede this
case before she received the requested documentation necessary to
prove petitioners' contentions. See Brice v. Commissioner, T.C.
Memo. 1990-355, affd. without published opinion 940 F.2d 667 (9th
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011