- 41 -
provides further justification for our holding that petitioners
are not required to use the actuarial method.
II. Burden of Proof
We must now determine which party bears the burden of proof
as to the factual issues in this case. Generally, the taxpayer
bears the burden of establishing the entitlement to any deduction
claimed. INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992);
New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934).
However, 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)(1). Credible
evidence is “‘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(a)(1) applies only if an individual taxpayer
complies with substantiation requirements, maintains all required
records, and cooperates with reasonable requests by the
Commissioner for witnesses, information, documents, meetings, and
interviews. Sec. 7491(a)(2).26
26Sec. 7491 is effective with respect to court proceedings
arising in connection with examinations commencing after July 22,
(continued...)
Page: Previous 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 NextLast modified: May 25, 2011