Sid Paul Ruckriegel - Page 18

                                       - 18 -                                         
               C.  Analysis                                                           
                    1.  The Paulan Direct Payments                                    
               For reasons discussed infra, we agree with respondent that             
          petitioners have failed to introduce credible evidence that the             
          Paulan direct payments provided them with bases in Sidal during             
          the audit years.  Therefore, it is unnecessary to address the               
          issue of petitioners’ compliance with the requirement of section            
          7491(a)(2)(A) “to substantiate any item” as it may apply to those           
          payments.                                                                   
               Because we find that petitioners have failed to introduce              
          credible evidence that the Paulan direct payments provided                  
          petitioners with basis in Sidal, we decide the basis issue as it            
          relates to those payments in respondent’s favor; i.e., the                  
          absence of credible evidence that petitioners acquired bases in             
          Sidal by virtue of the Paulan direct payments necessarily means             
          that petitioners cannot sustain their resulting burden of proof             
          with respect to those payments.  See Bernardo v. Commissioner,              
          supra n.7.                                                                  
                    2.  The Wire Transfer Payments                                    
               Because we base our decision (discussed infra) regarding               
          petitioners’ bases in Sidal attributable to the wire transfer               
          payments upon a preponderance of the evidence, assignment of the            
          burden of proof under section 7491 is unnecessary.  See FRGC                
          Inv., LLC v. Commissioner, T.C. Memo. 2002-276, affd. on this               






Page:  Previous  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  Next

Last modified: May 25, 2011