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OPINION
The Commissioner’s determinations are presumed correct, and
taxpayers bear the burden of proving them wrong. Rule 142(a)(1);
Welch v. Helvering, 290 U.S. 111, 115 (1933). As one exception
to this rule, section 7491(a) places upon the Commissioner the
burden of proof with respect to any factual issue relating to
liability for tax if the examination of the taxpayer’s records
for the subject year began after July 22, 1998, and the taxpayer
maintained adequate records, satisfied the substantiation
requirements, cooperated with the Commissioner, and introduced
during the court proceeding credible evidence with respect to the
factual issue. In that the record is sufficient for us to decide
this case on its merits, and neither party alleges the
applicability of section 7491(a) or of any other exception, we
need not and do not decide the burden of proof issue.3 D’Angelo
v. Commissioner, T.C. Memo. 2003-295.
We decide first whether the disputed payment of $3,082,710
is otherwise deductible as an ordinary and necessary business
3 Respondent argues that petitioner has failed to establish
that the $3,082,710 was not paid as consideration for the
redeemed stock. We find to the contrary. Respondent does not
question the fairness of the price paid for the stock in
petitioner. Presuming without conceding that the price
approximated the value of the stock in petitioner, we note that
petitioner can pinpoint $3,082,710 as attributable to its
settlement of the litigation and employment claims by subtracting
from the total consideration paid under the definitive agreement
the total consideration paid for the stock.
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