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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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