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OPINION
I. Burden of Proof
In general, respondent’s determinations are presumed
correct, and taxpayers bear the burden of proving them wrong.
Rule 142(a)(1); Welch v. Helvering, 290 U.S. 111, 115 (1933).
As one exception to this rule, section 7491(a) places upon the
Commissioner the burden of proof with respect to any factual
issue relating to liability for tax if the taxpayer maintained
adequate records, satisfied applicable substantiation
requirements, cooperated with respondent, and introduced during
the court proceeding credible evidence on the factual issue. A
taxpayer such as petitioner must prove that he has satisfied the
recordkeeping, substantiation, and cooperation requirements
before section 7491(a) places the burden of proof upon the
Commissioner. Prince v. Commissioner, T.C. Memo. 2003-247.
In that the record is sufficient for us to decide this case
on its merits based on a preponderance of the evidence, we need
not and do not decide which party bears the burden of proof in
this case as to the substantive issues. We note, however, that
we disagree with petitioner’s assertion that the notice of
deficiency is arbitrary because it, unlike a notice of deficiency
issued to Pomeroy, did not include or refer to an exhibit that
explained the income-adjustment allocations relating to H.K.
Peach. The notice of deficiency at hand correctly identified
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