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if no contrary evidence were submitted (without regard
to the judicial presumption of IRS correctness).” [Id.
(quoting H. Conf. Rept. 105-599, at 240-241 (1998),
1998-3 C.B. 747, 994-995)]
Applying this legal standard, we examined all the evidence that
petitioners introduced, including the “summary and
uncorroborated” testimony of Mr. Griffin, the Schedules C and E
attached to petitioners’ joint Federal income tax returns for
1995 and 1996, and the testimony of William LaRue, petitioners’
accountant and tax return preparer.4 Id. We concluded that the
“sparse evidence” introduced by petitioners was insufficient upon
which to base a decision that petitioners were “individually
engaged in a trade or business, within the meaning of section
4 The evidence in this case consisted then (and consists
now) of 18 numbered stipulations of fact, 4 joint exhibits, and
direct and cross-examination testimonies of Mr. Griffin and Mr.
William LaRue, petitioners’ accountant and tax return preparer
(Mr. LaRue). The joint exhibits consist of: (1) Petitioners’
joint Federal income tax return for 1995, (2) petitioners’ joint
Federal income tax return for 1996, (3) the statutory notice of
deficiency, and (4) an unsigned and undated “Stipulation and
Order” apparently relating to a suit that the City of Vacaville,
Cal., and the County of Solano had apparently brought against
Orange Tree Commerce Center Partnerships, among other defendants
(not including petitioners), with respect to certain delinquent
special assessments. At the trial of this case, petitioners
introduced Mr. Griffin’s and Mr. LaRue’s testimonies.
Petitioners submitted no additional evidence other than these two
witnesses’ testimonies, the stipulated facts, and the joint
exhibits. The evidence offered on behalf of respondent was
limited to the stipulations, joint exhibits, and cross-
examination of Mr. Griffin and Mr. LaRue.
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