Jerry S. Payne - Page 4

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          in excess of $207,295 and $133,264 for 1989 and 1990,                       
          respectively,3 and, more specifically, whether petitioner is                
          entitled to deductions for parking expenses of $1,443 and $1,492            
          and business bad debts of $14,000 and $8,000 for 1989 and 1990,             
          respectively, and (4) whether petitioner is liable for the                  
          accuracy-related penalty under section 6662(a) for each of the              
          audit years.4  A fifth issue, raised by petitioner for the first            
          time in his opening brief, is whether the notice of deficiency,             
          as it pertains to the constructive dividend and liquidating                 
          dividend issues, is “arbitrary and excessive”, thereby shifting             
          to respondent the burden of proof as to the existence and amount            
          of any deficiency for the audit years.  In the absence of such a            
          finding, petitioner bears the burden of proof.  See Rule 142(a).5           

               3  In the notice, respondent determined that petitioner’s              
          allowable Schedule C expenses for 1989 and 1990, respectively,              
          were $163,461 and $111,294.  The additional allowances resulted             
          from respondent’s examination of checks written by petitioner               
          during 1989 and 1990.                                                       
               4  Petitioner concedes that he is liable for additions to              
          tax under sec. 6651(a)(1) in amounts to be determined for 1989              
          and 1990, and respondent concedes that petitioner is not liable             
          for the civil fraud penalty under sec. 6663 for such years.                 
               5  Under certain circumstances, sec. 7491(a)(1) shifts the             
          burden of proof to respondent.  Sec. 7491 applies to court                  
          proceedings arising in connection with examinations commencing              
          after July 22, 1998, the date of enactment of the Internal                  
          Revenue Service Restructuring and Reform Act of 1998 (RRA 1998),            
          Pub. L. 105-206, 112 Stat. 685.  See RRA 1998 sec. 3001(c), 112             
          Stat 727.  Respondent alleges that the examination in this case             

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