- 3 -
whether respondent had met his burden of proof. Id. at 1021-
1022. The Court of Appeals stated:
Our application of 26 U.S.C. � 7491(a) in the
present case does not resolve the merits of the
deficiency issues. On the record before us, we cannot
determine whether the Commissioner has met his burden
of proof. It is not sufficient to summarily conclude
that the outcome is the same regardless of who bears
the burden of proof; if that were the case, � 7491(a)
would have no meaning. We therefore remand the case to
the tax court for further proceedings on the merits.
On remand, the tax court may reconsider all of the
evidence properly before it or hold a new hearing. In
either case, the tax court is instructed to make new
findings of fact in light of the shifted burden of
proof. If the same conclusion is reached by the tax
court without a new hearing, an explanation is
warranted as to how the existing record justifies the
conclusion that the Commissioner has met his burden of
proof. [Id. at 1022.]
After the remand, we afforded the parties an opportunity for
a new hearing. The parties agreed, however, that a new hearing
was unnecessary and requested that we reconsider the case on the
existing record after further briefing.
Background
Facts with respect to this case were found in our original
opinion in Griffin v. Commissioner, T.C. Memo. 2002-6. Those
facts, which are not in dispute, are incorporated by this
reference.
Petitioners owned all the stock of Griffin California
Enterprises, Inc. (Griffin California), an S corporation. In
turn, Griffin California held a 60-percent interest in each of
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