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Respondent determined a deficiency of $3,102 in petitioners’
1999 Federal income tax. After a concession by petitioners,1 the
sole issue for decision is whether petitioners’ gross income for
1999 must include a check for $11,091.90 that they received in
1999 but did not cash until 2000.
Some of the facts have been stipulated and are so found.
The stipulation of facts and the accompanying exhibits are
incorporated herein. Petitioners resided in Tracy, California,
at the time the petition was filed.2
Background
In 1993 petitioners acquired 40 acres of land in Tracy,
California. Petitioners planted apricot trees on the land for
the purpose of commercially farming apricots. Petitioners
entered into a management agreement with Stephen Pellegri, Sr.
1In the notice of deficiency, respondent determined that
petitioners failed to report dividend income of $80. Petitioners
conceded this issue.
2Prior to trial, petitioners filed a motion to shift the
burden of proof to respondent. Under sec. 7491(a) of the
Internal Revenue Code, the burden of proof shifts to respondent
if the taxpayer: (1) Has complied with substantiation
requirements under the Internal Revenue Code; (2) has maintained
all records required by the Internal Revenue Code and has
cooperated with all reasonable requests by respondent for
information, documents, meetings, etc.; and (3) introduces
credible evidence with respect to any factual issue relevant to
ascertaining the liability of the taxpayer for any tax imposed
under subtitle A or B. Petitioners have satisfied the
requirements of sec. 7491(a). However, as the discussion below
shows, the resolution of this case does not depend on which party
has the burden of proof, and therefore petitioners’ motion is
moot.
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Last modified: May 25, 2011