-8-
7491(a)(1); Rule 142(a). Section 7491 is effective with respect
to examinations commenced after July 22, 1998. See Internal
Revenue Service Restructuring and Reform Act of 1998, Pub. L.
105-206, sec. 3001(c), 112 Stat. 727. Although the relevant
examination was conducted after July 22, 1998, petitioners failed
to meet the requirements of section 7491(a)(1) and (2) in that
they did not present any credible evidence with respect to any
factual issue relevant to ascertaining their tax liability and
they did not maintain all records and cooperate with reasonable
requests by respondent for information and documents. The burden
is on the taxpayer to show that the prerequisites of section
7491(a)(2) are satisfied. Snyder v. Commissioner, T.C. Memo.
2001-255 (citing H. Conf. Rept. 105-599, at 240-241 (1998), 1998-
3 C.B. 747, 994-995). Because petitioners failed to meet the
requirements of section 7491(a), they bear the burden of proving
that respondent’s determinations of deficiencies in the notice of
deficiency are wrong.
A trust is disregarded for tax purposes if in substance it
is no more than a paper entity, a sham lacking any valid purpose
other than the avoidance of tax. Markosian v. Commissioner, 73
4(...continued)
with reasonable requests by the
Secretary for witnesses,
information, documents, meetings,
and interviews; and * * *
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