Terry I. and Louise Major - Page 17

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          1005.  The Court finds that Forms 1099 demonstrate that Terry               
          received income constituting sufficient evidence in this case.              
          Likewise, Form 1099-B shows that Louise Major received income               
          from “stocks, bonds, etc.”, and Form 1099-INT reveals that Louise           
          Major received income from interest.  Consequently, respondent              
          provided sufficient evidence linking petitioners to the income              
          underlying the statutory notices of deficiency.8                            
               However, section 7491 may shift the burden to respondent in            
          specified circumstances, for example, where the taxpayer produces           
          “credible evidence”.  Sec. 7491(a)(1).  The legislative history             
          of section 7491 clarifies the meaning of “credible evidence”:               
               Credible evidence is 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). A                     
               taxpayer has not produced credible evidence for these                  
               purposes if the taxpayer merely makes implausible                      
               factual assertions, frivolous claims, or tax protestor-                
               type arguments. The introduction of evidence will not                  
               meet this standard if the court is not convinced that                  
               it is worthy of belief. If after evidence from both                    
               sides, the court believes that the evidence is equally                 
               balanced, the court shall find that the Secretary has                  
               not sustained his burden of proof. * * * [H. Conf.                     
               Rept. 105-599, at 240-241 (1998), 1998-3 C.B. 747, 994-                
          In addition, to effectuate a shift in the burden, petitioners               
          must also maintain all records required by the Code and                     
          regulations thereunder and cooperate with reasonable requests by            

               8 This is with exception to amounts referred to supra notes            
          3 and 5.                                                                    

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