- 9 - dealership held the classic cars for sale to customers, then we must find for petitioner. We begin with who has the burden of proof. A. Burden of Proof The Commissioner’s determination in the notice of deficiency is generally presumed to be correct, and the taxpayer bears the burden of proving otherwise. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). If a taxpayer introduces credible evidence with respect to a factual issue relevant to ascertaining the taxpayer’s tax liability, however, the burden shifts to the Commissioner with respect to that issue, assuming the taxpayer meets certain other requirements.11 Sec. 7491(a)(1). The burden of proof does not shift unless the taxpayer has complied with the substantiation requirements, maintained required records, and cooperated with the Commissioner’s reasonable requests for witnesses, information, and meetings. Sec. 7491(a)(2)(A) and (B). The taxpayer has the burden of establishing that each requirement of section 7491(a)(2) has been met. Higbee v. Commissioner, 116 T.C. 438 (2001). Respondent concedes that 10(...continued) question whether property is held primarily for sale to customers in the ordinary course of one's business is "purely factual." Pritchett v. Commissioner, 63 T.C. 149, 162 (1974). 11Sec. 7491(a) applies to examinations commenced after July 22, 1998, and therefore applies to this case involving tax years 1999 and 2000.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