- 7 -
furnished to Mr. Abeyta and the section 912 exclusion. Attached
to their 2000 return was a Form 2555, Foreign Earned Income,
reporting as follows:
Cost of living and overseas differential 1$23,213
Less amount excludable under sec. 119 7,506
Foreign earned income2 15,707
1 It is unclear how petitioners computed this figure.
2 Petitioners purportedly claimed an exclusion for cost-of-living
allowances under sec. 912.
Respondent determined that petitioners were not entitled to
claim these exclusions and that petitioners are liable for self-
employment tax on the value of lodging. Respondent further
determined that petitioners are liable for the accuracy-related
penalty under section 6662(a) for an underpayment of tax.
Petitioners timely filed with the Court a petition
disputing the determined deficiency as well as the accuracy-
related penalty.
Discussion
Generally, the Commissioner’s determinations are presumed
correct, and the taxpayer bears the burden of proving that those
determinations are erroneous. Rule 142(a); Welch v. Helvering,
290 U.S. 111, 115 (1933). The burden of proof may shift to the
Commissioner under section 7491(a) in certain circumstances.
With respect to the substantive issues, section 7491(a) is not
applicable because we decide these issues without regard to the
burden of proof. With respect to a taxpayer’s liability for any
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