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If, in any court proceeding, the taxpayer introduces
credible evidence with respect to any factual issue
relevant to ascertaining the liability of the taxpayer
for any tax imposed under subtitle A or B, the
Secretary shall have the burden of proof with respect
to such issue.
As a prerequisite to the shifting of the burden under
section 7491(a) a taxpayer must: (1) Comply with statutory
substantiation and record-keeping requirements, sec.
7491(a)(2)(A) and (B); (2) cooperate with reasonable requests by
the Commissioner for “witnesses, information, documents,
meetings, and interviews”, sec. 7491(a)(2)(B); and (3) in cases
of partnerships, corporations, and trusts, meet the net worth
requirements set forth in section 7430(c)(4)(A)(ii), sec.
7491(a)(2)(C). Taxpayers bear the burden of showing that these
requirements are met. Higbee v. Commissioner, 116 T.C. 438, 440-
441 (2001); H. Conf. Rept. 105-599, at 240 (1998), 1998-3 C.B.
747, 994; S. Rept. 105-174, at 45 (1998), 1998-3 C.B. 537, 581.
The estate contends that it has complied with or met the
requirements and that it has presented credible evidence in the
form of its expert’s report and the stipulated facts and
exhibits. The evidentiary posture presented in this case is
similar to that in Estate of Deputy v. Commissioner, T.C. Memo.
2003-176. No fact witnesses were called to testify in this case.
As in Estate of Deputy, the parties here have stipulated the
operative facts and documents, and the testimony presented at
trial consisted of the cross-examination of the parties’ tendered
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Last modified: May 25, 2011