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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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