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554, 561-562 (1992). Petitioners timely filed their original
gift tax returns in April 1989. In late 1990, petitioners’ tax
counsel twice corresponded with a revenue agent regarding those
returns. At some time subsequent to this correspondence,
petitioners’ tax counsel advised petitioners that their 1988 gift
tax returns were being audited and that a deficiency was to be
proposed. Accordingly, in early 1992, petitioners responded to
the actions of the Internal Revenue Service (IRS) by hiring
Chaffe to evaluate, among other things, the 1988 stock transfer.
Upon receipt of Chaffe’s results, petitioners filed their amended
gift tax returns.
We can find nothing unusual about this sequence of events.
Respondent apparently argues that, because petitioners hired
Chaffe to reevaluate the 1988 stock transfer after they were
advised of the examination and proposed deficiency, we should be
highly suspicious of the values petitioners now contend to be
proper. In light of the facts before us, however, we think
petitioners’ actions were typical under the circumstances. Yet
this does not mean that we attribute any greater degree of
confidence to petitioners’ recomputed values than we would have
otherwise attributed had petitioners filed their amended returns
prior to discovering that a deficiency was being proposed.
Petitioners must carry their burden of proof; otherwise,
respondent will prevail. See id. at 577.
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