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OPINION
I. Burden of Proof
We begin with a threshold observation regarding burden of
proof. As a general rule, determinations by respondent are
presumed correct, and taxpayers bear the burden of proving
otherwise. Rule 142(a). Section 7491, however, may shift the
burden to the Commissioner in certain circumstances. Section
7491 is applicable to court proceedings that arise in connection
with examinations commencing after July 22, 1998, and reads in
pertinent part:
SEC. 7491. BURDEN OF PROOF.
(a) Burden Shifts Where Taxpayer Produces Credible
Evidence.--
(1) General rule.--If, in any court
proceeding, a taxpayer introduces credible
evidence with respect to any factual issue
relevant to ascertaining the liability of the
taxpayer for any tax imposed by subtitle A or B,
the Secretary shall have the burden of proof with
respect to such issue.
(2) Limitations.--Paragraph (1) shall apply
with respect to an issue only if--
(A) the taxpayer has complied with the
requirements under this title to substantiate
any item;
(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; * * *
* * * * * * *
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