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the Commissioner, subject to certain limitations, where a
taxpayer introduces credible evidence with respect to factual
issues relevant to ascertaining that taxpayer’s tax liability.
See Ashley v. Commissioner, T.C. Memo. 2000-376.
The record contains very little evidence regarding the
commencement date of the examination in this case. Respondent’s
notices of deficiency to each of the trusts included a form
prepared by the examining agent entitled “Income Tax Examination
Changes”, dated August 27, 1998, which supports a finding that
the examination began sometime before that date. Testimony
elicited by petitioners supports an inference that the
examination in question began before July 1998. Petitioner
testified that he met his current tax adviser, Kevin Allison, in
early 1997. Mr. Allison testified that he and the Castros met
approximately 6 months before petitioners’ audit began. This
testimony, while vague, suggests that the instant examinations
commenced before July 22, 1998.
In contrast to the evidence described above, there is
nothing in the record that allows us to conclude that the
examination in these cases commenced after July 22, 1998.
Petitioners have failed to convince us that section 7491 applies
to shift the burden of proof to respondent. We hold, therefore,
that the burden of proof is upon petitioners to prove
respondent's determinations are erroneous. See Rule 142(a);
Welch v. Helvering, 290 U.S. 111, 115 (1933).
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