- 8 - In certain circumstances, if the taxpayer introduces credible evidence with respect to any factual issue relevant to ascertaining the proper tax liability, section 7491 places the burden of proof on the Commissioner. Sec. 7491(a). Section 7491(a) applies only if an individual taxpayer complies with substantiation requirements, maintains required records, and cooperates fully with reasonable requests by the Commissioner for witnesses, information, documents, meetings, and interviews. Sec. 7491(a)(2). Credible evidence has been described as “‘the quality of evidence which, after critical analysis, the court would find sufficient upon which to base a decision on the issue if no contrary evidence were submitted’”. Higbee v. Commissioner, 116 T.C. 438, 442 (2001) (quoting H. Conf. Rept. 105-599, at 240 (1998), 1998-3 C.B. 755, 994). Section 7491 is effective with respect to court proceedings arising in connection with examinations commencing after July 22, 1998. Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. 105-206, sec. 3001(c), 112 Stat. 727. The parties stipulated that the examination of petitioner’s 1996 Federal income tax return commenced after the effective date of section 7491, and petitioner has established that he made the $50,000 payment to Ms. Springer in 1996 pursuant to the provisions in the marital settlement and the divorce decree requiring the payment of “alimony for the support andPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011