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B. Burden of Proof
Under generally applicable principles, petitioners bear the
burden of proving entitlement to a deduction resulting from
petitioner’s advances to Gandy’s. See Rule 142(a); United States
v. Janis, 428 U.S. 433, 441-442 (1976); Welch v. Helvering, 290
U.S. 111, 115 (1933); Amey & Monge, Inc. v. Commissioner, 808
F.2d 758, 761 (11th Cir. 1987), affg. T.C. Memo. 1984-642.
Petitioners argue that the notice of deficiency failed to
set forth the reasons for respondent’s determinations with
sufficient specificity to satisfy the requirements of section
7522 and that respondent should therefore bear the burden of
proof.
Section 7522(a) provides in relevant part that any notice of
deficiency “shall describe the basis for, and identify the
amounts (if any) of, the tax due * * *. An inadequate
description under the preceding sentence shall not invalidate
such notice.”
The purpose of section 7522 is to give the taxpayer notice
of the Commissioner’s basis for determining a deficiency. See
Shea v. Commissioner, 112 T.C. 183, 196 (1999). Here the notice
of deficiency sufficiently apprised petitioners of the basis for
respondent’s deficiency determination and identified the amount
of tax due. At trial, respondent has taken no position that
would require petitioners to present evidence different from that
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Last modified: May 25, 2011