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complaint by paying to petitioner in 1999 $30,000, inclusive of
costs, interest, and attorney fees.2 Of that amount, $9,691 was
retained by petitioner’s counsel under a contingent fee
arrangement. Respondent concedes that petitioners’ gross income
does not include this $9,691. Petitioner also paid in connection
with the litigation $5,964.34 in litigation costs (mainly
deposition expenses). Petitioner claims also to have paid
$662.73 in medical expenses related to the alleged injuries
underlying the complaint.
Discussion
Respondent’s determinations in the notice of deficiency are
presumed correct, and petitioners must prove those determinations
wrong in order to prevail. Rule 142(a); Welch v. Helvering,
290 U.S. 111, 115 (1933). The submission of this case to the
Court under Rule 122 does not change or otherwise lessen
petitioners’ burden of proof. Rule 122(b); Kitch v.
Commissioner, 104 T.C. 1, 5 (1995), affd. 103 F.3d 104 (10th Cir.
1996). Whereas in certain cases section 7491(a) shifts the
burden of proof to the Commissioner, we conclude that this is not
one of those cases. Petitioners have neither alleged that
section 7491 is applicable to this case nor established that they
have complied with the requirements of section 7491(a)(2)(A) and
2 But for this general description of the settlement, the
record does not provide any other details as to the terms or
circumstances of the settlement.
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