John and Yoon Ja Biazar - Page 3

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          incorporated herein by this reference.  At the time they filed              
          the petition, petitioners resided in Harbor City, California.               
               On Schedules C, Profit or Loss From Business, of their                 
          income tax returns for 1995, 1996, 1997, and 1998, petitioners              
          reported gross receipts from the minimart of $413,145, $437,331,            
          $509,512, and $487,614, respectively.  Petitioners signed their             
          1995 tax return on July 3, 1997, and respondent received their              
          1995 return on July 14, 1997.                                               
               Petitioners reported to the State Board of Equalization that           
          their gross receipts from the minimart in 1995 were $419,509.               
                                       OPINION                                        
          I.   Burden of Proof:  Section 7491(a)                                      
               At the conclusion of the trial, petitioners raised for the             
          first time the issue of the burden of proof shifting to                     
          respondent pursuant to section 7491(a).  Petitioners’ case was              
          set for trial five times, petitioners received five standing                
          pretrial orders, and petitioners were warned on the record more             
          than once about the consequences of failure to comply with the              
          standing pretrial order.  Nonetheless, petitioners failed to                
          comply with several aspects of the standing pretrial order,                 
          including failure to submit a trial memorandum.  Petitioners did            
          not introduce credible evidence with respect to the factual                 
          issues relevant to ascertaining their liability.  See sec.                  








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