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penalties. Respondent in his answer denies this allegation but
in his motion asserts that he has a burden of production under
section 7491(c) as to the additions to tax and accuracy-related
penalties. For the reasons stated below, we conclude that
petitioner has the burden of proof as to issues in this case.
Before section 7491 was added to the Code by the Internal
Revenue Service Restructuring and Reform Act of 1998, Pub. L.
105-206, sec. 3001(c), 112 Stat. 727, a taxpayer who petitioned
this Court generally had the burden of proving that the
Commissioner had erred as to any determination in issue. See
Rule 142(a)(1); see also Welch v. Helvering, 290 U.S. 111, 115
(1933). In certain cases, section 7491 changed this general rule
effective for court proceedings arising from examinations
commencing after July 22, 1998. In relevant part, section 7491
provides:
SEC. 7491. BURDEN OF PROOF.
(a) Burden Shifts Where Taxpayer Produces Credible
Evidence.--
(1) General rule.--If, in any court
proceeding, a taxpayer introduces credible
evidence with respect to any factual issue
relevant to ascertaining the liability of the
taxpayer for any tax imposed by subtitle A or
B, the Secretary shall have the burden of
proof with respect to such issue.
(2) Limitations.--Paragraph (1) shall
apply with respect to an issue only if--
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