Edward C. and Susan R. Hanna - Page 6

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               The Commissioner’s determinations set forth in a notice of             
          deficiency generally are presumed correct, and the taxpayer bears           
          the burden of showing that the determinations are in error.  Rule           
          142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).  Pursuant             
          to section 7491(a), the burden of proof as to factual matters               
          shifts to the Commissioner where the taxpayer complies with                 
          substantiation requirements, maintains records, and cooperates              
          fully with reasonable requests for witnesses, documents, and                
          other information.                                                          
               Petitioners contend that the burden of proof shifts to                 
          respondent.  Broadly construed, their argument appears to be:               
          (1) They fully cooperated with respondent by providing copies of            
          their records to him, and (2) respondent conceded in a letter               
          that respondent bears the burden of proof.                                  
               Based on our review of the record, we conclude that                    
          petitioners fully cooperated with respondent’s requests for                 
          documents and other information.  “For the burden to be placed on           
          the Commissioner, however, the taxpayer must comply with the                
          substantiation and record-keeping requirements of the Internal              
          Revenue Code.”  Higbee v. Commissioner, 116 T.C. 438, 441 (2001).           
          For the reasons discussed infra, petitioners did not comply with            
          these requirements.  Accordingly, this argument fails.                      
               Petitioners also rely on a letter from respondent dated June           
          2, 2003.  The letter informs petitioners that the statute of                
          limitations period for assessing their 2000 Federal tax liability           

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