Orneal and Martha Kooyers, et al. - Page 15

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                                       OPINION                                        
               As a general rule, the Commissioner’s determinations in a              
          notice of deficiency are presumed correct, and the burden is on             
          the taxpayer to prove otherwise.  Rule 142(a); Welch v.                     
          Helvering, 290 U.S. 111, 115 (1933).  The general rule does not             
          apply, however, under circumstances where section 7491 places the           
          burden of proof or production on the Commissioner.8                         
               The Commissioner bears the burden of proof with respect to a           
          factual issue relevant to ascertaining a taxpayer’s liability for           
          income tax, if the taxpayer introduces credible evidence with               
          respect to that factual issue.  Sec. 7491(a)(1).  The preceding             
          rule applies, however, only if the taxpayer has (i) complied with           
          requirements under the Code to substantiate any item, (ii)                  
          maintained all records required by the Code, and (iii) cooperated           
          with reasonable requests by the Secretary for information,                  
          documents, and meetings.  Sec. 7491(a)(2).  The taxpayer bears              
          the burden of proving that these requirements have been met.                
          Snyder v. Commissioner, T.C. Memo. 2001-255 (citing H. Conf.                
          Rept. 105-599, at 240-241 (1998), 1998-3 C.B. 747, 994-995).                




               8Sec. 7491 applies to court proceedings arising in                     
          connection with examinations beginning after July 22, 1998.                 
          Internal Revenue Service Restructuring and Reform Act of 1998,              
          Pub. L. 105-206, sec. 3001(a), 112 Stat. 726.  The year at issue            
          is 1998, and the examination began after July 22, 1998.  Thus,              
          sec. 7491 applies to this case.                                             





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