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OPINION
1. Burden of Proof
Taxpayers generally must prove respondent’s determination of
an income tax deficiency 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 the
Commissioner the burden of proof with respect to any factual
issue relevant to a taxpayer’s 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 it 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.
We do not find that petitioner maintained adequate records,
satisfied applicable substantiation requirements, or cooperated
with respondent. Accordingly, we hold that section 7491(a) does
not apply here to place the burden of proof upon respondent.
2. Abandonment Loss
Section 165(a) provides a deduction for any loss sustained
during the taxable year which is not compensated for by insurance
or otherwise. A loss from the abandonment of an asset is within
this section if: (1) The owner of the asset intended to abandon
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Last modified: May 25, 2011