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expenses in the order and by the categories as deducted on
petitioners’ returns.
Generally, the burden of proof is on the taxpayer. Rule
142(a)(1). The burden of proof may shift to the Commissioner
under section 7491 if the taxpayer establishes that he introduced
credible evidence and complied with the requirements of section
7491(a)(2)(A) and (B) to substantiate items, maintain required
records, and fully cooperate with the Secretary’s reasonable
requests. Section 7491 is effective with respect to Court
proceedings arising in connection with examinations by the
Commissioner commencing after July 22, 1998, the date of its
enactment by section 3001(a) of the Internal Revenue Service
Restructuring and Reform Act of 1998, Pub. L. 105-206, 112 Stat.
726.
Petitioners timely filed their return for the 1997 year.
Petitioners have not alleged, and it is not clear from the
record, that the examination of the 1997 return commenced after
July 22, 1998; accordingly, we conclude that the burden remains
on petitioners for 1997. The returns for 1998 and 1999 were
filed after the effective date of section 7491; therefore, the
examinations necessarily commenced after the effective date of
section 7491. Petitioners have argued neither that section 7491
is applicable nor that they have satisfied the requirements of
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