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petitioners cite no authority with regard to this argument, we
assume they are referring to the recently enacted section 7491.
However, section 7491 only applies to court proceedings arising
in connection with examinations commencing after July 22, 1998.
See Internal Revenue Service Restructuring and Reform Act of
1998, Pub. L. 105-206, sec. 3001(c), 112 Stat. 727. There is
nothing in the record which establishes that the examination in
this case commenced after July 22, 1998. We therefore find that
section 7491 does not operate to shift the burden of proof in
this case. Accordingly, the burden of proof is upon petitioner
to show respondent’s determinations to be in error. See Rule
142(a); Welch v. Helvering, 290 U.S. 111 (1933).
The first deductions at issue in this case relate to the
office expenses claimed in connection with petitioners’ Melaleuca
business. At trial, petitioners presented receipts and copies of
checks totaling $400 for office expenses. Petitioners claimed
$3,232 in office expenses on their return. The receipts were for
a computer printer and a cellular phone; because these are listed
property, see sec. 280F(d)(4)(iv), (v), these expenses are
subject to the provisions of section 274(d). In order to
substantiate the amount of expenses for listed property, a
taxpayer must establish the amount of business use and the amount
of total use for such property. See sec. 1.274-5T(b)(6)(i)(B),
Temporary Income Tax Regs., 50 Fed. Reg. 46006 (Nov. 6, 1985).
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