-7-
reported by the trusts. In their petition, petitioners only deny
having unreported income, without specifically addressing any of
respondent’s arguments.
We agree with respondent. Respondent’s determinations of
deficiencies in the notice of deficiency are presumed correct,
and petitioners bear the burden of proving those determinations
wrong. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115
(1933). In certain circumstances, if a taxpayer introduces
credible evidence with respect to any factual issue relevant to
ascertaining the taxpayer’s liability for tax, section 7491(a)
places the burden of proof on the Commissioner.4 See sec.
4 Specifically, sec. 7491(a)(1) and (2) provides in part:
SEC. 7491(a). Burden Shifts Where Taxpayer
Produces Credible Evidence.--
(1) General rule.--If, in any court
proceeding, a taxpayer introduces credible
evidence with respect to any factual issue
relevant to ascertaining the liability of the
taxpayer for any tax imposed by subtitle A or
B, the Secretary shall have the burden of
proof with respect to such issue.
(2) Limitations.--Paragraph (1) shall
apply with respect to an issue only if--
(A) the taxpayer has complied
with the requirements under this
title to substantiate any item;
(B) the taxpayer has
maintained all records required
under this title and has cooperated
(continued...)
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