- 17 - respondent increased Sparkman’s business income by the gross receipts of Mercury Solar PTO, including $195,275 of rebate income that HECO reported on a Form 1099 to Mercury Solar PTO. In addition, respondent disallowed losses that Sparkman reported as flowing through from HEH on the ground that Sparkman had failed to substantiate these amounts. Respondent determined that the increases to Sparkman’s income resulting from these adjustments were subject to self-employment tax. Finally, respondent determined penalties and additions to tax pursuant to sections 6651 and 6662. By separate notice of deficiency issued to Mercury Solar PTO, respondent disallowed all of Mercury Solar PTO’s claimed deductions and made other adjustments increasing Mercury Solar PTO’s reported income. Among other adjustments, respondent increased Mercury Solar PTO’s 1999 income by $195,275, to reflect the HECO rebate payments. OPINION I. Burden of Proof Petitioners have not claimed or established that section 7491(a) shifts the burden of proof to respondent with respect to any factual issue. Accordingly, petitioners bear the burden of 17(...continued) do not address them.Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Next
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