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Sec. 7491(a). Mr. Obot audaciously argues that the burden of
proof in this case should shift to the Commissioner. We
disagree. Though neither the Code nor the regulations define
“credible evidence”, the legislative history helps us:
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 * * *
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. [H. Conf.
Rept. 105-599, at 240-241 (1998), 1998-3 C.B. 747,
994-995.]
For us to shift the burden on a specific issue, not only
must Mr. Obot produce credible evidence, but he also must show
that he complied with the specific substantiation requirements
for the deduction in question, that he maintained all records,
and that he cooperated with the Commissioner’s reasonable
requests for items such as witnesses, information, and documents.
See sec. 7491(a)(2).
We find that Mr. Obot has not cooperated with the IRS.
Instead of producing the records from his business, he falsely
claimed that they were lost in a flood. The records he did
produce were not credible: he doctored receipts or concealed key
information before photocopying them. We conclude that the
burden of proof stays on him.
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Last modified: May 25, 2011