-5-
for the accuracy-related penalty.4 We address each issue in
turn, after first considering the burden of proof.
I. Burden of Proof
Petitioner generally has the burden of proof. See Rule
142(a). Petitioner asserted for the first time in his reply
brief that the burden of proof should be shifted to respondent.
Section 7491 applies to this case because the examination of
petitioner’s income tax returns for the years at issue began
after the statute’s effective date, but petitioner failed to
substantiate the claimed expenses and failed to maintain adequate
records.5 Accordingly, petitioner does not meet the requirements
4Petitioner also asserts for the first time in his post-
trial brief that he used an IRA distribution he received in 1999
to finance a first-time home purchase. Petitioner stipulated
before trial, however, that he had not reached age 59-1/2 when he
received either IRA distribution, that neither IRA distribution
was received on account of death, disability, medical expenses,
higher education expenses, or to finance a first-time home
purchase, and that both IRA distributions were taxable. A
stipulation of fact is binding on the parties and is treated as a
conclusive admission. Rule 91(e). The Court will not permit a
party to a stipulation to qualify, change, or contradict the
stipulation except where justice requires. Id. Petitioner did
not ask to be relieved from the stipulations or present grounds
that he should not be bound to his admission. See id.; Israel v.
Commissioner, T.C. Memo. 2003-338; Said v. Commissioner, T.C.
Memo. 2003-148, affd. 112 Fed. Appx. 608 (9th Cir. 2004). We
conclude that the stipulations are binding, and, accordingly, we
need not further consider petitioner’s assertions regarding his
IRA distributions.
5Sec. 7491(a) shifts the burden of proof to the Commissioner
under certain circumstances if the taxpayer introduces credible
evidence and satisfies the necessary substantiation and
documentation requirements. Sec. 7491 is effective with respect
to court proceedings arising in connection with examinations by
the Commissioner commencing after July 22, 1998, the date of
enactment of the Internal Revenue Service Restructuring and
Reform Act of 1998, Pub. L. 105-206, sec. 3001(a), 112 Stat. 726.
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