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income reported on the Form 1099-MISC was earned by Mr. Fullen.
However, section 6201(d) clearly requires not only that the
taxpayer assert a reasonable dispute, but also must have fully
cooperated with the Commissioner before the burden of production
will shift to the Commissioner. Sec. 6201(d).
Assuming arguendo that petitioner did fully cooperate with
respondent, the Court concludes respondent has met his burden of
production. Respondent produced copies of checks issued by SAKB,
several of which were endorsed by petitioner. The sum total of
these checks corresponds to the amount of unreported nonemployee
compensation reported on the Form 1099-MISC. Respondent’s
reliance on the information return is adequately supported by the
check copies.
Alternatively, the burden of proof may shift to the
Commissioner under section 7491 if the taxpayer establishes
compliance with the requirements of section 7491(a)(2)(A) and (B)
by substantiating items, maintaining required records, and fully
cooperating with the Commissioner’s reasonable requests. See
Higbee v. Commissioner, 116 T.C. 438, 440-441 (2001). Section
7491 is effective with respect to court proceedings arising in
connection with examinations by the Commissioner commencing after
July 22, 1998, the date of its enactment by section 3001(a) of
the Internal Revenue Service Restructuring and Reform Act of
1998, Pub. L. 105-206, 112 Stat. 685, 726.
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Last modified: May 25, 2011