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respect to factual issues relevant to ascertaining the taxpayer’s
liability for a tax (under subtitle A or B), the burden of proof
with respect to such factual issues will be placed on the
Commissioner. For the burden to be placed on the Commissioner,
however, the taxpayer must comply with the substantiation and
record-keeping requirements of the Internal Revenue Code. See
sec. 7491(a)(2)(A) and (B). In addition, section 7491(a)
requires that the taxpayer cooperate with reasonable requests by
the Commissioner for “witnesses, information, documents,
meetings, and interviews”. Sec. 7491(a)(2)(B). Finally, the
benefits of section 7491(a) are unavailable in the cases of
partnerships, corporations, and trusts unless the taxpayer meets
the net worth requirements of section 7430(c)(4)(A)(ii). See
sec. 7491(a)(2)(C).
Respondent argues that because petitioners have failed to
meet the requirements of section 7491(a)(1) and (2), the burden
of proof should remain with petitioners as to the remaining issue
associated with respondent’s determination of petitioners’ 1996
tax liability. We therefore examine the evidence to establish
whether petitioners have presented credible evidence and have met
the other requirements of section 7491(a)(1) and (2) so as to
place the burden of proof on respondent.
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Last modified: May 25, 2011