-15-
because California had suspended DDL’s powers, rights, and
privileges. We noted that California’s action resulted from
DDL’s failure to pay its California income taxes. Upon appeal,
our decision in David Dung Le, M.D., Inc. v. Commissioner, supra,
was affirmed by the Court of Appeals for the Ninth Circuit.
OPINION
The parties assert, and we agree, that petitioners have the
burden of proof as to all issues in this case except the issues
of transferee liability and fraud penalties. Respondent bears
the burden of proof as to these latter two issues. Secs.
6901(a), 7454(a); Rule 142(b), (d).
A. Status of DDL
Petitioners argue that petitioner did not operate his
medical practice in a corporate form in 1990 and 1991. We
disagree. Petitioners agree that petitioner initially conducted
his medical practice as a corporation but argue that petitioner
abandoned practicing medicine through his corporation when he
moved to Orange County. On the basis of the record as a whole,
including our observation and perception of petitioner when he
testified at trial about this issue, we find petitioner’s
testimony incredible and decline to rely upon it to support
petitioners’ positions herein.10 Neonatology Associates, P.A. v.
10 For similar reasons, we also find Ms. Le’s testimony
incredible and decline to rely upon it to support petitioners’
(continued...)
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