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See also Internal Revenue Service Restructuring and Reform Act of
1998, Pub. L. 105-206, sec. 3001(c), 112 Stat. 727, regarding
effective date. Section 7491 is applicable here in that
examination of petitioner’s 1996, 1997, and 1998 tax years began
after July 22, 1998.
With respect to the deficiency determinations in dispute,
the operative rules are contained in section 7491(a).
Petitioners make the assertion, apparently for the first time on
opening brief, that the burden of proof as to factual issues
shifts to respondent because “Petitioners have produced credible
testimony and documents, most especially regarding their reliance
on CPA’s [sic] and an attorney.” The Court, however, concludes a
shift is not appropriate on this record for the reasons set forth
below.
First, as can be gleaned from the preceding discussion, the
Court finds that petitioners have failed to introduce credible
evidence with respect to the majority of the individual
expenditures in contention. Credible evidence for purposes of
section 7491(a) is defined as “the quality of evidence which,
after critical analysis, the court would find sufficient upon
which to base a decision on the issue if no contrary evidence
were submitted (without regard to the judicial presumption of IRS
correctness).” H. Conf. Rept. 105-599, at 240-241 (1998), 1998-3
C.B. 747, 994-995. Such quality is lacking in much of what has
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