George A. and Christine M. Evan - Page 7

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          advertising expenses, listed generally as “Postage” or “P.O. Box            
          Rental”; office expenses, also listed generally in categories               
          such as “Supplies”, “Computer Ware”, and “Telephone”; and a fee             
          to the Office of Banks and Real Estate, State of Illinois.  The             
          summaries did not report the purpose of any of the expenses                 
          listed.                                                                     
                                       OPINION                                        
          I.   Burden of Proof                                                        
               As a general rule, the Commissioner’s determinations are               
          presumed correct, and the taxpayer bears the burden of proving              
          that those determinations are erroneous.  Rule 142(a).  This                
          rule, however, is subject to the provisions of section 7491(a),             
          under which the burden of proof may, under certain circumstances,           
          be shifted to the Commissioner.                                             
               On the basis of the record, we hold that section 7491(a)               
          does not operate to place the burden of proof on respondent                 
          because:  (1) Petitioners did not introduce credible evidence               
          with respect to any factual issue relevant to ascertaining their            
          liability; (2) petitioners did not comply with the requirements             
          to substantiate their deductions; and (3) petitioners did not               
          maintain all records required.  Sec. 7491(a); see Higbee v.                 
          Commissioner, 116 T.C. 438, 440-441 (2001).                                 









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