James H. Upchurch - Page 20

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               Respondent bears the burden of proof because the section                 
          6661 addition to tax was first raised in respondent's answer,                 
          rather than in the notice of deficiency.  Rule 142(a).                        
          Respondent contends that the record reflects the following facts              
          that satisfy her burden: (1) Petitioner knew that he would                    
          receive tax benefits $3,000 over his total cash investment; (2)               
          petitioner conducted virtually no independent investigation or                
          evaluation of the promoter's (or its associates' or agents')                  
          expertise or of the economic viability of the energy device; (3)              
          after investing, no inquiry was made as to whether an energy                  
          device had been placed in service, even though deductions and                 
          credits were claimed.  In summary, respondent contends that the               
          record reflects that petitioner was motivated by tax benefits                 
          rather than economic profit.  Respondent also notes that other                
          taxpayers with the same or substantially similar investments in               
          energy devices have been found by this Court to have lacked                   
          substantial authority for the treatment of the tax shelter items,             
          citing Schillinger v. Commissioner, T.C. Memo. 1990-640.                      
               Petitioner argues that he relied on persons whom he believed             
          to be more knowledgeable and that such reliance was reasonable.               
          Petitioner references four court opinions which he believes                   
          support his position that section 6661 should not be applied                  
          here.  Durrett v. Commissioner, 71 F.3d 515 (5th Cir. 1996),                  
          affg. in part and revg. in part T.C. Memo. 1994-179; Vorsheck v.              
          Commissioner, 933 F.2d 757 (9th Cir. 1991); Heasley v.                        




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