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Mexico (Treaty)4 from being taxed by the United States on their
receipt of the $137,221. Petitioners testified that the $137,221
was reported incrementally to the Immigration and Naturalization
Service upon each entry by petitioner into the United States, but
they failed to present any admissible evidence in this proceeding
to corroborate that testimony. They sought to introduce into
evidence various documents in Spanish, which they claimed would
have verified the alleged sale and the subsequent reporting of
same to the Mexican authorities. However, petitioners were
barred from using these documents at trial because they did not
translate and properly authenticate them.
OPINION
I. Burden of Proof as to Deficiency
Taxpayers generally must prove respondent’s determinations
wrong in order to prevail. Rule 142(a)(1); Welch v. Helvering,
290 U.S. 111, 115 (1933). As one exception to this rule, section
7491(a) places upon respondent the burden of proof with respect
to any factual issue related to a taxpayers’ tax liability if
they maintained adequate records, satisfied applicable
substantiation requirements, cooperated with respondent, and
introduced during the court proceeding credible evidence on the
4 Petitioners refer to the Convention & Protocol for the
Avoidance of Double Taxation and the Prevention of Fiscal Evasion
with Respect to Taxes on Income, Sept. 18, 1992, U.S. - Mex., S.
Treaty Doc. No. 103-07, reprinted in 2 Tax Treaties (CCH) at
5903.
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