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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.
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Last modified: May 25, 2011