- 4 - OPINION I. Burden of Proof As a general rule, the notice of deficiency is entitled to a presumption of correctness, and the taxpayer bears the burden of proving the Commissioner’s deficiency determinations incorrect. Rule 142(a);3 Welch v. Helvering, 290 U.S. 111, 115 (1933).4 Section 7491(a), however, provides that if a taxpayer introduces credible evidence and meets certain other prerequisites, the Commissioner shall bear 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 Internal Revenue Code (Code). For the burden to shift, however, the taxpayer must comply with the substantiation and record-keeping requirements as provided in the Code and have cooperated with the Commissioner. See sec. 7491(a)(2). The estate did not claim that section 7491(a) applies. Accordingly, the burden remains on the estate. 3 Unless otherwise indicated, all Rule references are to the Tax Court Rules of Practice and Procedure, and all section references are to the Internal Revenue Code as in effect at the time of decedent’s death. 4 The presumption of correctness does not apply when the Government’s determination is a “‘naked’ assessment without any foundation whatsoever”. United States v. Janis, 428 U.S. 433, 441 (1976). The estate argues that the notice of deficiency may not be entitled to a presumption of correctness if we conclude that the report of its expert, ATI, had no probative value. As we give some probative value to the ATI report, we conclude that this is not an issue.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