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OPINION
A. Whether Respondent Bears the Burden of Proof Under Section
7491(a)
Petitioners contend that respondent bears the burden of
proof under section 7491(a). We disagree.
Under section 7491(a), the Commissioner bears the burden of
proof with respect to factual issues if, inter alia, the taxpayer
has: (1) Complied with substantiation requirements under the
Internal Revenue Code, sec. 7491(a)(2)(A); (2) maintained all
records required by the Internal Revenue Code, sec.
7491(a)(2)(B); and (3) cooperated with reasonable requests by the
Secretary for information, documents, and meetings, id.
Taxpayers bear the burden of proving that these requirements are
met. See H. Conf. Rept. 105-599, at 239 (1998), 1998-3 C.B. 747,
993; S. Rept. 105-174, at 45 (1998), 1998-3 C.B. 537, 581. The
record does not show whether petitioners substantiated their
bases, kept records of their expenses, or cooperated with
respondent’s agents. Thus, section 7491(a) does not apply.
Respondent’s determination is presumed to be correct, and
petitioners bear the burden of proof. Rule 142(a)(1); Welch v.
Helvering, 290 U.S. 111, 115 (1933).
B. Whether Petitioners May Deduct More Depreciation on the
Crenshaw Blvd. Property Than Respondent Allowed for 1999
Petitioners contend that they may deduct depreciation of
$11,059 with respect to the Crenshaw Blvd. property for 1999.
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Last modified: May 25, 2011