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petitioners reported only the $15,904.33 severance payment, as
properly reflected in a Form W-2, Wage and Tax Statement, which
was duly issued by the District.
The District’s Office of the Chief Financial Officer (the
OCFO) issued a Form 1099-Misc., for the 2001 taxable year that
was faulty in two respects: it erroneously disclosed the
disputed settlement amount as $357,462, and was never delivered
to petitioners. A corrected Form 1099-Misc., for taxable year
2001 (the restated 1099) inaccurately restated the disputed
settlement amount as $119,154.33, listed an incorrect address for
petitioner under the form’s appropriate caption (corresponding to
the address of one of the law firms that represented petitioner
in the settlement), and was not ultimately sent to petitioner’s
correct address until March 24, 2004. Correspondence from the
OCFO to petitioner, dated March 22, 2004, indicates that the
numerical error in the restated 1099 is the result of including
the $15,904.33 severance payment in the disputed settlement
amount and excluding the $31,750 attorney’s fees compensation.
OPINION
1. Burden of Proof
The parties dispute whether the burden of proof in this case
has been shifted to respondent pursuant to section 7491. Section
7491(a) imposes the burden of proof on respondent if the taxpayer
introduces credible evidence with respect to any factual issue,
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