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sections 652(a) or 662(a) (including in the gross income of
beneficiaries certain trust amounts). Also in the case of both
trusts, respondent explains that petitioners have failed to show
that they are entitled to any deductions in excess of the amounts
determined by respondent.
OPINION
I. Burden of Proof
In pertinent part, Rule 142(a) provides: “The burden of
proof shall be upon the petitioner”. In certain circumstances,
if a petitioner introduces credible evidence with respect to any
factual issue relevant to ascertaining such petitioner’s
liability for tax, section 7491 places the burden of proof on
respondent. See sec. 7491(a)(1); Rule 142(a). Section 7491 is
effective with respect to examinations commenced after July 22,
1998. See Internal Revenue Service Restructuring and Reform Act
of 1998 (RRA 1998), Pub. L. 105-206, sec. 3001(c)(2), 112 Stat.
726. Respondent concedes that the examination of petitioners
commenced after July 22, 1998.
Section 7491(a)(2) establishes prerequisites (the
prerequisites) to establishing that the burden of proof may lie
with respondent under section 7491(a)(1). In pertinent part,
section 7491(a)(2) provides:
(2) Limitations.--Paragraph (1) shall apply with
respect to an issue only if--
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