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OPINION
I. Burden of Proof
As a general rule, the taxpayer bears the burden of proving
the Commissioner's deficiency determinations incorrect. Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). Section
7491(a), however, provides that if a taxpayer introduces credible
evidence and meets certain other prerequisites, the Commissioner
bears the burden of proof with respect to factual issues relating
to the liability of the taxpayer for a tax imposed under subtitle
A or B of the Code. For the burden to shift, however, the
taxpayer must comply with the substantiation and record-keeping
requirements as provided in the Internal Revenue Code and have
cooperated with the Commissioner. See sec. 7491(a)(2).
Petitioner did not claim that section 7491(a) applies.
Furthermore, petitioner failed to introduce sufficient evidence
to shift the burden to respondent. Accordingly, section 7491(a)
does not apply in this case.
In the statutory notice of deficiency herein, respondent
stated that the expenses petitioner listed on the Schedule C must
be taken as deductions on Schedule A, Itemized Deductions, and
are subject to the 2-percent limitation. In his calculations in
the notice of deficiency, respondent did not allow these expenses
as Schedule A deductions subject to the 2-percent limitation. In
his pretrial memorandum and opening statement at trial,
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Last modified: May 25, 2011