Herbert C. Buck - Page 4

                                        - 4 -                                         
          claimed various expenses totaling $86,249.07.3                              
               On June 29, 2001, respondent issued to petitioner the notice           
          with respect to his taxable years 1997 and 1998.  In that notice,           
          respondent, inter alia, determined to disallow for each of the              
          years at issue the Schedule C deductions that petitioner claimed            
          in his 1997 Schedule C and in his 1998 Schedule C.  Respondent              
          further determined in the notice that petitioner is liable for              
          each of the years at issue for the accuracy-related penalty under           
          section 6662(a).                                                            
               The parties do not address section 7491.  Petitioner filed             
          his 1997 return on July 15, 1998, and his 1998 return on May 24,            
          1999.  We presume that respondent’s examination of those returns            
          began after July 22, 1998, and that section 7491(a) is applicable           
          in the instant case.  On the record before us, we find that                 
          petitioner’s burden of proof relating to the deficiency determi-            
          nations does not shift to respondent under section 7491(a).  That           
          is because petitioner has not complied with the substantiation              
          and recordkeeping requirements of section 7491(a)(2)(A) and (B).            
          Accordingly, we find that petitioner has the burden of proving              
          that respondent’s deficiency determinations are wrong.  Rule                
          142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).  With                 

               3Petitioner made a computational error when he added the               
          total expenses claimed in petitioner’s 1998 amended Schedule C.             
          The correct total of such expenses is $86,249.07.                           

Page:  Previous  1  2  3  4  5  6  Next

Last modified: May 25, 2011