Zeeman Manufacturing Company, Inc. - Page 4

                                        - 4 -                                         
          needs do not exceed such taxable income, petitioner nonetheless             
          will be able to reduce its accumulated taxable income by the                
          amount of any reasonable accumulations.  Sec. 535(a), (c).                  
               If, pursuant to section 534(c), a taxpayer submits a                   
          statement of the grounds (together with facts sufficient to show            
          the basis thereof) on which the taxpayer relies to establish that           
          all or any part of its earnings and profits have not been                   
          permitted to accumulate beyond the reasonable needs of its                  
          business (section 534(c) statement or statement), respondent                
          bears the burden of proving the grounds set forth in the                    
          statement.  Sec. 534(a)(2).  Respondent, however, bears the                 
          burden of proof in such a case                                              
               only with respect to the relevant ground or grounds set                
               forth in the statement submitted by the taxpayer, and                  
               only if such ground or grounds are supported by facts                  
               (contained in the statement) sufficient to show the                    
               basis therof [sic].  [Sec. 1.534-2(a)(2), Income Tax                   
               Regs.]                                                                 
          The burden of proof remains on the taxpayer, inter alia, if the             
          taxpayer submits a statement "but the ground or grounds on which            
          the taxpayer relies are not relevant to the allegation or, if               
          relevant, the statement does not contain facts sufficient to show           
          the basis thereof."  Sec. 1.534-2(b)(2), Income Tax Regs.                   
               Accordingly, the only issue we decide is the sufficiency of            
          the statement submitted by petitioner.2  In Bittker & Eustice,              

          2    Petitioner contends that respondent bears the burden of                
          proof as to the accumulated earnings issue in its entirety.  In             
                                                             (continued...)           




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