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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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