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Warren concluded that petitioner had allowable Schedule C
business expenses of $39,439 for 1996 and $65,494 for 1997.2
OPINION
A. Whether Respondent Bears the Burden of Proof as to Items of
Income and Deduction
Petitioner contends that respondent bears the burden of
proof under section 7491(a) as to the items of income and
deduction disallowed in the notice of deficiency. We disagree.
The Commissioner bears the burden of proof under section
7491(a)3 if the taxpayer has: (1) Complied with substantiation
2 Shortly before trial respondent allowed additional
deductions for Schedule C business expenses of $1,759 for 1996
and $6,512 for 1997.
3 Sec. 7491 provides 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
(continued...)
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