- 7 -
respondent is not required to guess as to what they may be."
Hughes, Inc. v. Commissioner, 90 T.C. at 18-19.
If petitioner's statement with respect to a particular
ground provides sufficient facts to support an assertion that
some accumulation was reasonable but fails to provide sufficient
facts to support the full amount of the accumulation, then we
will impose the burden of proof on respondent only to the extent
the supporting facts are sufficiently disclosed. Petitioner
bears the burden of proof for amounts in excess of those
supported in the statement. Rule 142(a); Soros Associates Intl.,
Inc. v. Commissioner, supra. Additionally, petitioner bears the
burden of proof with respect to any grounds or amounts not
mentioned in the statement. Sec. 1.534-2(a)(2), Income Tax Regs.
For purposes of the accumulated earnings tax, the term
"reasonable needs of the business" includes the "reasonably
anticipated needs of the business". Sec. 537; Technalysis Corp.
v. Commissioner, 101 T.C. 397, 409 (1993). If the facts
disclosed in the statement are sufficiently substantial,
material, definite, and clear to permit respondent to prepare for
trial, the statement will be deemed sufficient as to such
grounds. J.H. Rutter Rex Manufacturing Co. v. Commissioner, 853
F.2d 1275, 1283 (5th Cir. 1988), affg. in part, revg. in part and
remanding T.C. Memo. 1987-296; see also Thompson Engg. Co. v.
Commissioner, 80 T.C. 672, 693 (1983), revd. on another issue 751
F.2d 191 (6th Cir. 1985).
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