Mazhar Tabrezi, f.k.a. Agha Hussain, and Sajida Razvi - Page 8

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          proof is on the taxpayers.  Rule 142(a).  Accordingly, the burden           
          of establishing that the insolvency exception applies is                    
          generally placed on the taxpayers.  Traci v. Commissioner, T.C.             
          Memo. 1992-708; Bressi v. Commissioner, T.C. Memo. 1991-651,                
          affd. 989 F.2d 486 (3d Cir. 1993).  In order to prove insolvency            
          and therefore qualify for the exception under section                       
          108(a)(1)(B), a taxpayer                                                    
               must prove by a preponderance of the evidence that he                  
               or she will be called upon [as of the date of                          
               cancellation of the debt] to pay an obligation claimed                 
               to be a liability and that the total amount of                         
               liabilities so proved exceed the fair market value of                  
               his or her assets.                                                     
          Merkel v. Commissioner, 192 F.3d 844, 850 (9th Cir. 1999), affg.            
          109 T.C. 463, 468 (1997).                                                   
               There are exceptions to the general rule that the taxpayers            
          bear the burden of proof.  See Rule 142(a)(1).  One of those                
          exceptions is if the Commissioner raises a “new matter”.  Id.  If           
          the new matter is allowed to be raised, Rule 142(a) requires that           
          the Commissioner bear the burden of proof.  Shea v. Commissioner,           
          112 T.C. 183, 190-191 (1999).  The Commissioner raises a new                
          matter when he “attempts to rely on a basis that is beyond the              
          scope of the original deficiency determination”.  Id.  In                   
          particular, a new matter is raised when the Commissioner’s new              
          theory “‘either alters the original deficiency or requires the              

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