- 14 - Conclusion Petitioners have not shown that respondent’s agents violated section 7602(c). Statutory Limitation on Financial Status Audits Citing various background questions that Leary asked Carol at their initial meeting on July 16, 1998, petitioners contend that on or about that date respondent used a financial status or economic reality examination technique in violation of section 7602(e).8 Section 7602(e) became effective on the date of enactment of RRA 1998; i.e., July 22, 1998. H. Conf. Rept. 105-599, at 270 (1998), 1998-3 C.B. 755, 1024. Petitioners do not contend that any actions taken by respondent’s agents on or after July 22, 1998, violated section 7602(e). Accordingly, section 7602(e) has no application to this case. Burden of Proof Petitioners contend that respondent bears the burden of proof pursuant to section 7491. Respondent contends that section 7491 is inapplicable. We agree with respondent. 8 Sec. 7602(e), as added by Internal Revenue Service Restructuring & Reform Act of 1998, Pub. L. 105-206, sec. 3412, 112 Stat. 751, provides: (e) Limitation on Examination of Unreported Income.--The Secretary shall not use financial status or economic reality examination techniques to determine the existence of unreported income of any taxpayer unless the Secretary has a reasonable indication that there is a likelihood of such unreported income.Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
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