Marlin G. Springer - Page 8

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               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 and                       

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Last modified: May 25, 2011