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$36,651 for 2001 and that Mr. and Mrs. Breeding are liable for
accuracy-related penalties. Petitioners timely filed petitions.
Discussion
We are asked to decide whether petitioners may exclude the
value of lodging provided by their employer under section 119 and
whether certain petitioners are entitled to exclusions from
income for certain allowances under section 912. We are also
asked to consider whether certain petitioners are liable for
accuracy-related penalties. We begin with the burden of proof.
I. Burden of Proof
In general, the Commissioner’s determinations in the
deficiency notice are presumed correct, and the taxpayer bears
the burden of proving that the Commissioner’s determinations are
in error. See Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115
(1933). The burden of proof may shift to the Commissioner under
certain circumstances, however, if the taxpayer introduces
credible evidence and establishes that he or she substantiated
items, maintained required records, and fully cooperated with the
Commissioner’s reasonable requests. Sec. 7491(a)(2)(A) and (B).
Petitioners repeatedly failed to cooperate with respondent to
prepare these cases for trial and were admonished by the Court
when the case was called for trial. Petitioners have therefore
not met the requirements of section 7491(a)(2)(B), and the burden
of proof remains with them.
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