Monty Bisceglia and Patricia Bisceglia - Page 8




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          presumptive correctness of respondent’s determination.  Rule                
          142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933); Conti v.              
          Commissioner, 39 F.3d 658, 663 (6th Cir. 1994), affg. and                   
          remanding T.C. Memo. 1992-616; United States v. Walton, 909 F.2d            
          915, 918 (6th Cir. 1990).4  On the other hand, respondent has the           
          burden with respect to the $1,856 increase in the 1993 deficiency           
          as sought in his Answer to Amended Petition.  Rule 142(a).                  
          Because petitioners have not contested the items giving rise to             
          the asserted increase in deficiency, we conclude and hold that              
          respondent has met his burden of proof as to those items.5                  

               4 In certain circumstances, if a taxpayer introduces                   
          credible evidence with respect to any factual issue relevant to             
          ascertaining the taxpayer's liability for tax, sec. 7491 places             
          the burden of proof on the Commissioner.  See sec. 7491(a)(1);              
          Rule 142(a)(2).  Sec. 7491 is effective with respect to court               
          proceedings arising from examinations commenced after July 22,              
          1998.  See Internal Revenue Service Restructuring and Reform Act            
          of 1998, Pub. L. 105-206, sec. 3001(c)(2), 112 Stat. 685, 726.              
          The parties have stipulated that respondent’s examination began             
          in May 1996.  Accordingly, sec. 7491 is inapplicable.                       
               5 The asserted increase in the 1993 deficiency arises from             
          two adjustments respondent made after issuing the notice of                 
          deficiency.  The first adjustment corrects the amount of cash in            
          banks utilized in petitioners’ 1993 opening net worth.  The other           
          adjustment corrects the amount of the adjustment for capital                
          losses not deducted in that year (with correlative adjustments              
          being made for 1994 and 1995).  Petitioners have stipulated the             
          corrected figures for cash in banks, and petitioners’ tax                   
          returns, admitted as exhibits herein, show that the correction to           
          the capital loss amount is appropriate.  Petitioners do not                 
          contest these corrections.                                                  
               Respondent’s Answer to Amended Petition also identifies two            
          other adjustments to the net worth computation that were made               
                                                             (continued...)           






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