- 14 -
(A) the taxpayer has complied with the
requirements under this title to substantiate
any item; [and]
(B) the taxpayer has maintained all records
required under this title and has cooperated
with reasonable requests by the Secretary for
witnesses, information, documents, meetings,
and interviews; * * *
The burden is on the taxpayer to show that the prerequisites are
satisfied. See H. Conf. Rept. 105-599, at 240-241 (1998), 1998-3
C.B. 747, 994-995. At trial, counsel for petitioners (who has
since withdrawn as counsel) conceded that petitioners bear the
burden of proof with respect to the deficiencies determined by
respondent. We accept that concession and so find.6
Respondent bears the burden of production with respect to
penalties. See sec. 7491(c).
II. Deficiencies in Tax
A. Introduction
1. Petitioners’ Arguments
Respondent has adjusted petitioners’ income by attributing
to petitioners items of income reported by Complete Connections
Trust and J&R Trust. Respondent has done so under the various
6 Even if petitioners had not (by their counsel) so
conceded, there is evidence to support such a finding. For
instance, petitioners failed to respond to respondent’s
interrogatories (and were sanctioned by the Court for such
failure) and failed to cooperate with respondent in stipulating
facts for trial. Respondent’s motions to compel production of
documents and responses to interrogatories contain a litany of
petitioners’ failures to provide information to respondent during
the audit of their income tax returns or cooperate in preparation
of this case for trial. Petitioners have provided no rebuttal to
such litany.
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011