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OPINION
We first address section 7491(a). The parties agree that
the examination in this case commenced after the effective date
of section 7491. The parties disagree, however, over whether the
burden of proof shifts to respondent under that section. Section
7491(a)(1) may shift the burden of proof to the Commissioner of
Internal Revenue with respect to any factual issue relevant to
determining the tax liability of a taxpayer provided that the
taxpayer has introduced credible evidence with respect to any
such issue and has complied with the applicable requirements of
section 7491(a)(2).
As we understand petitioner’s position under section
7491(a), he contends that he introduced credible evidence con-
cerning the factual issues presented under section 165 (viz, when
he discovered the alleged theft loss with respect to the custom
house (alleged custom house theft loss) for which he is claiming
a deduction for taxable year 2000; the amount of the alleged
custom house theft loss; and the absence at the end of 2000 of a
reasonable prospect of recovery of the alleged custom house theft
loss) and that he complied with the applicable requirements of
section 7491(a)(2).4 Therefore, according to petitioner, the
4Petitioner also contends that he introduced credible evi-
dence concerning the factual issue presented under sec.
6651(a)(1) (viz, whether he filed a return for taxable year 2000)
and that the burden of proof shifts to respondent under sec.
(continued...)
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