Ouan Bland - Page 8

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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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