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facts necessary to notify respondent of the bases of the grounds
asserted. Soros Associates Intl., Inc. v. Commissioner, T.C.
Memo. 1982-79. The taxpayer is not required to state facts
sufficient to meet a burden of proof which it may never have.
Id.
The Court of Appeals for the Fifth Circuit3 has stated:
We think �534's language indicates that the statement
simply serves a notice function. Whether the "grounds"
divulged in the statement subsequently prove convincing
is irrelevant to this function. * * * But just as the
statement is not supposed to be legally sufficient on
the question of definiteness, neither is it supposed to
be a substitute for testimony at trial. [Motor Fuel
Carriers, Inc. v. Commissioner, 559 F.2d 1348, 1352
(5th Cir. 1977), revg. T.C. Memo. 1975-296; citations
omitted.4]
To "show its hand" sufficiently, the taxpayer must provide
details, where appropriate, with respect to specific amounts
needed to be expended for reasonable business needs "so that
3 In Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir.
1981), the Court of Appeals for the Eleventh Circuit, the circuit
to which any appeal of the instant case would lie, adopted as
binding precedent all of the decisions of the Court of Appeals
for the Fifth Circuit rendered prior to the close of business on
Sept. 30, 1981.
4 Respondent argues that petitioner relies on Motor Fuel
Carriers, Inc. v. Commissioner, 559 F.2d 1348 (5th Cir. 1977),
revg. T.C. Memo. 1975-296, as holding that the Court of Appeals
for the Fifth Circuit requires a lower standard than other courts
in deciding the sufficiency of sec. 534(c) statements. We
disagree. Petitioner, contrary to respondent's assertion, cites
Motor Fuel Carriers, Inc. for the proposition that, for purposes
of shifting the burden of proof pursuant to sec. 534, a sec.
534(c) statement is subject to a lower standard than the
substantive inquiry at trial pursuant to sec. 533(a).
Accordingly, we conclude that respondent’s argument is without
merit.
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