- 4 -
as a payer, had filed an information return with the Internal
Revenue Service for payments of $25,980 to Mr. Bonner.
Petitioners failed to include these payments as income on their
1998 Federal income tax return. A notice of deficiency was
issued to them for that income, and they instituted an action in
this Court challenging the proposed deficiency in docket No. 839-
01S. At the trial of that case, petitioner denied receiving any
money from Mr. Brown during 1998, and, only when petitioner was
confronted with the canceled checks at trial, did he reluctantly
concede that the payments had in fact been made. A decision was
entered in favor of respondent, T.C. Summary Opinion 2001-170.
The case for petitioners' 1998 tax year is relevant to the
current case because that case brings into focus petitioner's
credibility on the issue before this Court as to whether similar
payments were received from Mr. Brown during 1999. Section 7491
provides that the burden of proving facts relevant to a
deficiency may shift to the Commissioner under section 7491 if
the taxpayer introduces credible evidence with respect to any
factual issue relevant to ascertaining a tax liability, provided
the taxpayer has substantiated all items at issue and has
generally maintained books and records with respect to the item
at issue. Petitioner maintained no books and records of the
income he earned during 1999, and the Court holds that section
7491 is not applicable in this case. Section 6201(d), however,
Page: Previous 1 2 3 4 5 6 7 Next
Last modified: May 25, 2011