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In the notice of deficiency, respondent determined the
payments were not alimony and therefore disallowed the claimed
deduction.4 Respondent indicated he also issued a notice of
deficiency to Ms. Reichner for the taxable year 2002. Although
that notice of deficiency was not made part of the record,
respondent contends that Ms. Reichner did not report the $12,000
of monthly payments she received as gross income. Respondent
determined that the payments she received were alimony and
therefore includable in her gross income. Ms. Reichner did not
petition the Tax Court for a redetermination.
Discussion
In general, the Commissioner’s determinations set forth in a
notice of deficiency 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 respondent under certain circumstances. Furthermore,
if a taxpayer asserts a reasonable dispute with respect to the
income reported on an information return and fully cooperates
4 Respondent was unaware of the stipulated order until
shortly before trial. As a result, the notice of deficiency does
not address whether, because of the stipulated order, a portion
of the $12,000 was excludable from petitioners’ gross income. At
the end of trial, the Court kept the record open to allow
petitioners to produce a copy of the stipulated order. When the
document was received as part of a supplemental stipulation of
facts, the Court admitted the document into evidence and closed
the record.
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