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limitations for criminal prosecution, as well as assessment of
taxes and penalties against her for substantial understatement.
Notwithstanding her prior denials, Ms. Clark testified at
trial that she and Ms. Ellis embezzled money from BBTS. Ms.
Clark’s testimony, however, did not provide even a general amount
of money that she allegedly embezzled, nor could she reconstruct
an amount by linking any specific items purchased with allegedly
embezzled funds.
Ms. Clark claimed that Ms. Ellis invited her to join an
ongoing embezzlement scheme shortly after Ms. Clark resumed
working at BBTS. Ms. Ellis was aware that Ms. Clark was
petitioner’s former wife and that Ms. Clark and petitioner were
engaged in a personal relationship at the time.
Ms. Clark’s then husband, Ted Clark, supposedly knew of Ms.
Clark’s embezzlement. Ted Clark did not testify at the trial.
OPINION
As a general rule, the Commissioner’s determinations are
presumed correct, and the taxpayer bears the burden of proving
otherwise. Rule 142(a)(1); Welch v. Helvering, 290 U.S. 111, 115
(1933). Section 7491(a)(1) provides that the burden of proof
will shift to the Commissioner when the taxpayer has introduced
credible evidence with respect to any factual issue relevant to
ascertaining the liability of the taxpayer for any tax. However,
the burden of proof does not shift to the Commissioner unless the
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Last modified: May 25, 2011