- 10 - B. Whether Items Deducted on the Forms 1120S for 2001 for JRC and RSC Flow Through to Petitioner’s Individual Tax Return 1. Background JRC and RSC delinquently filed their Forms 1120S for 2001, and petitioner delinquently submitted his Form 1040 for 2001. In his Form 1040, petitioner reported flow-through expenses from JRC and RSC. Respondent disregarded those expenses in the amended answer because petitioner did not respond to respondent’s request to substantiate them. After trial, this Court gave petitioner 4 months to provide respondent with substantiation of the flow- through items. Petitioner failed to do so. 2. Burden of Proof Petitioner filed a motion to shift the burden of proof to respondent 2 months after the deadline for providing the additional substantiation. Petitioner contends that respondent bears the burden of proving the increased deficiency respondent asserted in the amendment to answer. Petitioner contends that respondent bears the burden of proof under Rule 142(a)(1) because the denial of deductions is a new matter which, if sustained, would increase the deficiency. We disagree.4 Respondent did not allow petitioner any deductions for 2001 in the notice of deficiency, the answer, or the amendment to 4 Petitioner concedes he is taxable on the increased income reported on his Form 1040 for 2001. Thus, the burden of proof does not affect whether he is taxable on those amounts.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011