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Program. In other words, respondent contends that it would be
more appropriate to multiply petitioner’s gross sales, $91,281,
by the Tip Compliance Program tip rate of 15.4 percent to arrive
at an unreported room service tip income figure of $14,057.
Also, in the notice of deficiency, respondent determined
that petitioner is liable for the accuracy-related penalty
pursuant to section 6662(a) and (b)(1) for the taxable year 2000
of $591.60.
Discussion
As a general rule, the determinations of the Commissioner in
a notice of deficiency are presumed correct, and the taxpayer
bears the burden of proving the Commissioner’s determinations in
the notice of deficiency to be in error. Rule 142(a); Welch v.
Helvering, 290 U.S. 111, 115 (1933). As one exception to this
rule, section 7491(a) places upon the Commissioner the burden of
proof with respect to any factual issue relating to liability for
tax if the taxpayer maintained adequate records, satisfied the
substantiation requirements, cooperated with the Commissioner,
and introduced during the Court proceeding credible evidence with
respect to the factual issue. Although neither party alleges the
applicability of section 7491(a), we conclude that the burden of
proof has not shifted with respect to the unreported income.
However, respondent has the burden of production with respect to
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