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gross gambling income that is not reflected in the notice of
deficiency. See Kalisch v. Commissioner, T.C. Memo. 1986-541,
affd. without published opinion 838 F.2d 461 (3d Cir. 1987).
In certain circumstances, section 7491 places the burden of
proof on respondent with regard to certain factual issues.
Section 7491 is effective with respect to court proceedings
arising in connection with examinations commencing after July 22,
1998. Internal Revenue Service Restructuring & Reform Act of
1998, Pub. L. 105-206, sec. 3001(c)(2), 112 Stat. 727. The
examination in the instant case began in December 1998.
Therefore we evaluate whether respondent bears the burden of
proof pursuant to section 7491.
Section 7491(a)(1) provides that if, in any court
proceeding, the taxpayer introduces credible evidence with
respect to factual issues relevant to ascertaining the taxpayer’s
liability for a tax (under subtitle A or B), the burden of proof
with respect to such factual issues will be placed on the
Commissioner, provided that various conditions are met. One of
the conditions is that the taxpayer must comply with the
substantiation and record-keeping requirements of the Internal
Revenue Code. See sec. 7491(a)(2)(A) and (B).7 Under the
7 For the burden to be placed on the Commissioner, the
taxpayer must also cooperate with reasonable requests by the
Commissioner for “witnesses, information, documents, meetings,
and interviews”. Sec. 7491(a)(2)(B). Respondent argues that
(continued...)
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