Caralan Trust, et al. - Page 18




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          with respondent under section 7491(a)(1).  In pertinent part,               
          section 7491(a)(2) provides:                                                
               SEC. 7491.  BURDEN OF PROOF.                                           
                    *    *    *    *    *    *    *    *                              
               (2) Limitations.--Paragraph (1) shall apply with                       
               respect to an issue only if--                                          
                    (A) the taxpayer has complied with the                            
                    requirements under this title to substantiate                     
                    any item; [and]                                                   
                    (B) the taxpayer has maintained all records                       
                    required under this title and has cooperated                      
                    with reasonable requests by the Secretary for                     
                    witnesses, information, documents, meetings,                      
                    and interviews; * * *                                             
          The burden is on the taxpayer to show that the prerequisites are            
          satisfied.  See H. Conf. Rept. 105-599, at 240-241 (1998), 1998-3           
          C.B. 747, 994-995.  At trial, counsel for the J. and C. Shirleys            
          maintained that her clients had satisfied the prerequisites.  On            
          brief, however, the J. and C. Shirleys propose no findings with             
          respect to either’s satisfaction of the prerequisites, nor do               
          they argue that the prerequisites are satisfied.  We have made              
          findings adequate for us to conclude that they did not cooperate            
          in respondent’s examination of their 1995 returns.  The                     
          J. Shirleys and, likewise, the C. Shirleys have failed to prove             
          that they have satisfied the prerequisites.  Accordingly,                   
          respondent does not on account of section 7491(a) bear the burden           
          of proof with respect to either Shirleys’ liability for tax.                







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