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the Secretary for witnesses, information, documents, meetings,
and interviews. Sec. 7491(a)(2). Petitioners here did not
satisfy the prerequisites under section 7491(a)(1) and (2) for
such a shift. Consequently, except for additions to tax subject
to section 7491(c), as to which respondent bears the burden of
production, petitioners bear the burden of persuasion and the
burden of production in this case.
B. Filing Requirement
The Code imposes a Federal tax on the taxable income of
every individual. Sec. 1. Gross income for the purposes of
calculating taxable income is defined as “all income from
whatever source derived”. Sec. 61(a). Every U.S. resident
individual whose gross income for the taxable year equals or
exceeds the exemption amount is required to make an income tax
return.9 Sec. 6012(a)(1)(A). Petitioners had aggregate gross
income totaling at least $44,971.74, and each individually had
gross income totaling at least $18,381.08 for taxable year 2001.
Both petitioners’ gross incomes exceeded the filing threshold for
the 2001 taxable year, and petitioners were, therefore, required
to file an income tax return.10
9 Terry denied he was a “U.S. person”; however, at trial, he
asserted that he was a “citizen of the United States”. Section
7701(a)(30) defines the term “United States person” as, inter
alia, a “citizen or resident of the United States”.
10 In petitioners’ letter, contained in the record, Terry
makes reference to the validity of the filing requirement. Our
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