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Respondent determined a deficiency of $15,883 in
petitioners’ Federal income tax for 2001 and an addition to tax
under section 6651(a)(1) in the amount of $1,298.75 for the late
filing of petitioners’ Federal income tax return for 2001.
The issues for decision are whether petitioners are (1)
entitled to an itemized deduction for a casualty loss under
section 165(c), (2) entitled to an itemized deduction for
unreimbursed employee expenses, (3) entitled to trade or business
expense deductions for rent, car and truck expenses, and other
expenses under section 162(a), and (4) liable for the section
6651(a)(1) addition to tax for the late filing of their 2001
Federal income tax return.2
Some of the facts were stipulated. Those facts, with the
exhibits annexed thereto, are so found and made part hereof.
2Under sec. 7491(a), the burden of proof shifts to the
Commissioner if the taxpayer introduces credible evidence with
respect to any factual issue relevant to ascertaining the
taxpayer’s liability. Under sec. 7491(a)(2), the burden of proof
does not shift if the taxpayer has not complied with the
substantiation requirements with regard to any item, nor does the
burden of proof shift if the taxpayer has not cooperated with
reasonable requests by respondent for witnesses, information,
documents, meetings, and interviews. The facts of this case do
not, in the Court’s view, shift the burden of proof to
respondent. Under sec. 7491(c), the burden of production is on
the Commissioner with respect to the late filing penalty under
sec. 6651(a)(1). However, the burden of proof remains on the
taxpayer to persuade the Court that the imposition of the
addition to tax is incorrect. Higbee v. Commissioner, 116 T.C.
438, 446-447 (2001).
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Last modified: May 25, 2011