- 35 - examination in the instant case commenced after July 22, 1998; accordingly, we consider whether respondent bears the burden of proof under section 7491(a). Section 7491(a)(1) provides that if, in any court proceeding, the taxpayer introduces credible evidence with respect to factual issues relevant to ascertaining the taxpayer’s liability for a tax, the Commissioner will have the burden of proof with respect to such factual issues. The taxpayer must also comply with substantiation and record-keeping requirements and must cooperate with reasonable requests by the Commissioner for “witnesses, information, documents, meetings, and interviews”. See sec. 7491(a)(2)(A) and (B). The statute does not expressly provide what constitutes credible evidence. The conference committee’s report states: Credible evidence is the quality of evidence which, after critical analysis, the court would find sufficient upon which to base a decision on the issue if no contrary evidence were submitted (without regard to the judicial presumption of IRS correctness). A taxpayer has not produced credible evidence for these purposes if the taxpayer merely makes implausible factual assertions, frivolous claims, or tax protestor-type arguments. The introduction of evidence will not meet this standard if the court is not convinced that it is worthy of belief. If after evidence from both sides, the court believes that the evidence is equally balanced, the court shall find that the Secretary has not sustained his burden of proof. [H. Conf. Rept. 105-599, at 240-241 (1998), 1998-3 C.B. 747, 994-995.] See also Higbee v. Commissioner, 116 T.C. 438, 447 (2001).Page: Previous 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 Next
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