Shannon D. Mullins - Page 8

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          142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).  Pursuant             
          to section 7491, the burden of proof as to factual matters shifts           
          to the Commissioner under certain circumstances.  Petitioner has            
          neither alleged that section 7491(a) applies nor established his            
          compliance with the requirements of section 7491(a)(2)(A) and (B)           
          to substantiate items, maintain records, and cooperate fully with           
          respondent’s reasonable requests.  Therefore, the burden of proof           
          remains on petitioner with respect to the issues set forth in the           
          notice of deficiency.                                                       
               As to the new issue tried by the consent of the parties,               
          the burden of proof is on respondent.  Rule 142(a); Wott v.                 
          Commissioner, T.C. Memo. 1986-319, affd. without published                  
          opinion 819 F.2d 1143 (7th Cir. 1987).  In addition, respondent             
          has the burden of production under section 7491(c) with respect             
          to the addition to tax and penalty.                                         
          A.  Petitioner’s Pro Rata Share of Income From Edgington Mullins            
               In determining his or her income tax, a shareholder in an S            
          corporation must take into account his or her pro rata share of             
          the S corporation’s “nonseparately computed income or loss”.                
          Sec. 1366(a)(1)(B).  A selling shareholder’s pro rata share of S            
          corporation income for a taxable year is calculated by allocating           
          an equal portion of the corporation’s items to each day in the              

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