Estate of Webster E. Kelley, Deceased, John R. Louden and Patricia L. Louden, Personal Representatives - Page 4

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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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