- 8 - penalty under section 6662(a) for negligence or intentional disregard of rules or regulations. Discussion As a general rule, the burden of proof in a deficiency action is on the taxpayer. See Rule 142(a); INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992); Welch v. Helvering, 290 U.S. 111, 115 (1933). Effective for court proceedings arising in connection with examinations commencing after July 22, 1998, section 7491(a)(1) serves to shift the burden of proof to the Commissioner when the taxpayer introduces credible evidence with respect to a factual issue relevant to ascertaining the liability of the taxpayer. However, section 7491(a)(2) places limitations on this burden-shifting rule. Thus, section 7491(a)(1) applies with respect to an issue only if (inter alia) the taxpayer has complied with all statutory and regulatory requirements to substantiate any item and the taxpayer has maintained all records required under the Internal Revenue Code. See sec. 7491(a)(2)(A) and (B). We have previously found as a fact that respondent commenced the examination of petitioner’s 1995 income tax return no later than June 1997. Accordingly, the burden- shifting rule of section 7491(a)(1) has no application to that year. In contrast, we have found as a fact that respondent commenced the examination of petitioner’s 1996 income taxPage: 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