James G. and Linda C. Jaroff - Page 10

                                       - 10 -                                         
                                     Discussion                                       
               This case is part of a larger group of cases involving                 
          cattle and sheep breeding partnerships organized by Mr. Hoyt.               
          For a description of the Hoyt organization and its operation, see           
          e.g., Barnes v. Commissioner, T.C. Memo. 2004-266; River City               
          Ranches #1, Ltd. v. Commissioner, T.C. Memo. 2003-150; Mekulsia             
          v. Commissioner, T.C. Memo. 2003-138, affd. __ F.3d __ (6th Cir.            
          Nov. 18, 2004); River City Ranches #4, J.V. v. Commissioner, T.C.           
          Memo. 1999-209, affd. 23 Fed. Appx. 744 (9th Cir. 2001); Mitchell           
          v. Commissioner, T.C. Memo. 1995-411.                                       
               The Commissioner’s determinations in a notice of deficiency            
          are generally presumed correct, and the taxpayer must prove those           
          determinations wrong in order to prevail.  Rule 142(a); Welch v.            
          Helvering, 290 U.S. 111, 115 (1933).4  In this case, in which the           
          correctness of respondent’s determinations of tax has been                  
          conceded, the burden is on petitioners to show that the additions           
          to tax and accuracy-related penalties should not apply.                     
               Petitioners did not appear at trial and did not testify as             
          to facts underlying their investment in the Hoyt cattle operation           


               4  Sec. 7491, which under some circumstances shifts the                
          burden of proof or production to the Commissioner, is                       
          inapplicable in this case.  Sec. 7491 applies only to court                 
          proceedings arising in connection with examinations commencing              
          after July 22, 1998.  Internal Revenue Service Restructuring and            
          Reform Act of 1998, Pub. L. 105-206, sec. 3001(c), 112 Stat. 727.           
          Respondent’s examination of petitioners’ 1994 return began before           
          Aug. 16, 1996, and their 1995 return was examined before Feb. 24,           
          1997.                                                                       




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011