Leo J. Polack - Page 10




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          the dividend-paying capacity; whether or not the enterprise has             
          goodwill or other intangible value; and the size of the block of            
          stock to be valued.  Rev. Rul. 59-60, 1959-1 C.B. at 238-239.               
               Both experts considered these and other factors in examining           
          ZSI and in constructing their respective appraised value.7                  
          Nevertheless, petitioner’s analysis of the factors and of ZSI’s             
          worth yielded a value nearly half that which respondent’s                   
          appraisal yielded.8  The parties identified, and the Court                  


               7The Internal Revenue Service Restructuring & Reform Act of            
          1998, Pub. L. 105-206, sec. 3001, 112 Stat. 726, added sec.                 
          7491(a), which is applicable to court proceedings arising in                
          connection with examinations commencing after July 22, 1998.                
          Under sec. 7491, Congress requires the burden of proof to be                
          placed on the Commissioner, subject to certain limitations, where           
          a taxpayer introduces credible evidence with respect to factual             
          issues relevant to ascertaining the taxpayer’s liability for tax.           
          In the instant case, petitioners have not raised the application            
          of this provision or otherwise argued that respondent bears the             
          burden of proof in this case.  Further, the record indicates that           
          the Commissioner’s examination commenced before July 22, 1998.              
          In any event, both parties adduced testimony and offered exhibits           
          in support of their respective positions, and the evidence so               
          introduced, though sparse, was not equally compelling.                      
          Accordingly, we have based our conclusion upon the preponderance            
          of the evidence and not upon any allocation of the burden of                
          proof.  See Estate of Harper v. Commissioner, T.C. Memo. 2002-              
          121.                                                                        
               8Petitioner contends we should accept his expert’s testimony           
          because his expert is significantly more experienced than                   
          respondent’s expert.  As our discussion indicates, our conclusion           
          turns on factual disputes and reflects our finding that                     
          petitioner’s conclusions regarding disputed factual issues are              
          not grounded on credible evidence.  An expert, no matter how                
          skilled, can only work with the factual record he is given by his           
          client or obtains through his own efforts.  In this case,                   
          petitioner’s expert relied primarily on petitioner’s unsupported            
          opinion regarding the disputed factual matters.                             





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