- 22 -
1975) (rejecting an attempt to apply collateral estoppel even
though the exact issue was raised in a prior Tax Court proceeding
but, because the Commissioner abandoned the issue during the
litigation, no judicial determination or findings were made),
affg. 60 T.C. 368 (1973).
From a factual standpoint, petitioner’s entitlement to
Schedule C expenses comparable to those claimed here was, with
one exception, not litigated in Megibow v. Commissioner, T.C.
Memo. 1998-455. As to the one exception, this Court sustained
respondent’s denial of deductions claimed by petitioner for
business-related legal fees. Id. Accordingly, the case at bar
presents no grounds for applying either equitable or collateral
estoppel.
II. Deficiencies and Penalties
A. Burden of Proof
As a general rule, determinations by the Commissioner are
presumed correct, and the taxpayer bears the burden of proving
otherwise. Rule 142(a). Section 7491 may operate, however, in
specified circumstances to place the burden on the Commissioner.
Section 7491 is applicable to court proceedings that arise in
connection with examinations commencing after July 22, 1998, and
reads in pertinent part:
SEC. 7491. BURDEN OF PROOF.
(a) Burden Shifts Where Taxpayer Produces Credible
Evidence.--
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