- 11 -
11/30/95 11/30/96 11/30/97
Food & lodging1 $6,163 $6,218 $6,001
Medical 1,756 2,061 1,325
Total dividends 7,919 8,279 7,326
1The record does not explain why the amounts of
dividends for food and lodging expenses included in Mr.
Tschetter’s income exceed the amounts disallowed as
deductions to Wolf Creek Farm.
OPINION
Issue 1. Expenses Incurred by Wolf Creek Farm To Provide Medical
Benefits, Food, and Housing to Mr. Tschetter in 1995,
1996, and 1997
A. Positions of the Parties3
Respondent disallowed deductions taken by Wolf Creek Farms
for medical costs (health insurance premiums and other medical
care expenses), food, lodging (including property insurance,
property taxes, and utilities for the farmhouse), and
depreciation of the farmhouse. Respondent asserts that the
medical costs, food, and lodging expenses are Mr. Tschetter’s
3Under certain circumstances, sec. 7491 places the burden of
proof or production on the Commissioner. Sec. 7491 applies to
court proceedings arising in connection with tax examinations
beginning after July 22, 1998. Internal Revenue Service
Restructuring and Reform Act of 1998, Pub. L. 105-206, sec.
3001(a), 112 Stat. 726. Petitioners timely filed their returns
for the years at issue. Hence, all of the returns were filed on
or before Apr. 15, 1998. The record does not disclose when the
examination of petitioners’ tax returns began, and it is possible
that the examination began before July 23, 1998. Petitioners do
not contend that sec. 7491 applies in these cases, and they have
not otherwise asserted that respondent has the burden of proof or
production with respect to any issue presented in these cases.
We therefore conclude that sec. 7491 does not apply, and
petitioners have the burden of proof and production.
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