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exception to this rule, section 7491(a) places upon the
Commissioner the burden of proof with respect to any factual
issue relating to liability for tax if the taxpayer maintained
adequate records, satisfied the substantiation requirements,
cooperated with the Commissioner, and introduced during the Court
proceeding credible evidence with respect to the factual issue.
Although neither party alleges the applicability of section
7491(a), we conclude that the burden of proof has not shifted to
respondent with respect to either the unreported income or the
gambling loss deductions. Therefore, petitioner bears the burden
of showing that he correctly reported his gross income for
taxable year 1999, and, in the event he had unreported gambling
income, petitioner bears the burden of showing that he is
entitled to gambling loss deductions to offset that income.
1. Unreported Income
As stated previously, respondent determined that petitioner
failed to report gambling income in tax year 1999 of $50,000.
However, petitioner argues that the moneys won gambling were not
income to him because they were won at the blackjack table,1 and
the “pit boss” of the Grand Victoria Casino said they were not
taxable.
1Petitioner testified, at trial, that the Grand Victoria
Casino’s “pit boss” told him that winnings received on a gambling
table were not gross income, but winnings received from slot
machine gambling were gross income.
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Last modified: May 25, 2011